1. CIS 465 - Fall 2000 - IT ChallengesPage 1 Information Technology: The Challenge and Potential

2. CIS 465 - Fall 2000 - IT ChallengesPage 2 A Quick Review: uWhat is an Information System? Evolutionary concept Early emphasis on support of operations, management, analysis, and decision-making in organizations. Today technology provides support for not only for decision- making, but support for communication and information access. Our emphasis will be on the support of work systems that use information technology to capture, transmit, store, retrieve, manipulate, and display information. uGorry and Scott-Morton’s Framework 1971 Framework talked of looking at information systems in a decision-making framework. Although limited to just decision- making, it provides a perspective on the wide range of opportunity for information systems support.

3. Work-Centered Analysis Framework

4. CIS 465 - Fall 2000 - IT ChallengesPage 4 The WCA Framework uA useful way of thinking about information systems and their relationship to customers and participants from the perspective of a business professional. uA work system is a system that produces products for internal and external customers through a business process performed by human participants with the help of information technology. uAn information system is a particular type of work system that uses information technology to capture transmit store, retrieve, manipulate, or display information, thereby supporting one or more other work systems.

5. CIS 465 - Fall 2000 - IT ChallengesPage 5 Amazon.com uThe point of this case is not about technology essentially, rather it is about how information systems and information technology can transform business operations. uHow does Amazon.com provide value for its customers? uWhat has “transformed” in this business? uHow has competitive advantage changed to competitive necessity?

6. Work-Centered Analysis Framework

7. CIS 465 - Fall 2000 - IT ChallengesPage 7 Amazon.Com - WCA CUSTOMER Person who purchases books Wholesalers that supply the books Amazon.com’s shipping department PRODUCT Information about books that might be purchased Information describing each book order Books that are eventually delivered

8. CIS 465 - Fall 2000 - IT ChallengesPage 8 Amazon.Com - WCA BUSINESS PROCESS Major Steps: Purchaser logs on to www.amazon.com Purchaser identifies desired book or gives search criteria Purchaser looks at book-related information and decides what to order Purchaser enters order Amazon.com orders book from wholesaler Wholesaler sends book to Amazon.com Shipping department packages order and sends it to the purchaser Rationale: Instead of forcing book buyers to go to typical bookstores, permit them to use online access from home or from work.

9. CIS 465 - Fall 2000 - IT ChallengesPage 9 Amazon.Com - WCA PARTICIPANTS People interested in purchasing books Order fulfillment department of wholesaler Shipping department of Amazon.com INFORMATION Orders for books Price and other information about each book TECHNOLOGY Personal computer used by purchaser Computers and networks used by Amazon.com for order processing

10. CIS 465 - Fall 2000 - IT ChallengesPage 10 Some Common Themes uThe nature of business is changing. New combinations of product and services. Limitations of geography are disappearing technology is changing rapidly organizations are flatter and less hierarchical. uBusiness professional must participate in all the major phases of building and maintaining IT- enabled systems. uAdvances in IT will drive business innovation. uThe success of IT-enabled systems is not guaranteed by using the latest technology.

11. CIS 465 - Fall 2000 - IT ChallengesPage 11 Questions? uIdentify some new products or services that have changed due to information technology? uIdentify some organizations that have become less hierarchical.

12. CIS 465 - Fall 2000 - IT ChallengesPage 12 Information Technology: The Challenge and Potential

13. CIS 465 - Fall 2000 - IT ChallengesPage 13 Key Point uBusiness Professionals participate in all the major phases of building and maintaining IT- enabled systems, and therefore need knowledge and skills necessary for that participation. uNext Question then…. How are Information Systems Developed?

14. Phases in Building and Maintaining Systems

15. CIS 465 - Fall 2000 - IT ChallengesPage 15 Phases in Building and Maintaining Systems uInitiation Define the need to change a work system. uDevelopment Acquire and configure necessary hardware, software, and other resources for IT-related and non-IT related functions. uImplementation Make the system operational in the organization. uOperation and Maintenance On-going operation and maintenance of the work system and the information system.

16. CIS 465 - Fall 2000 - IT ChallengesPage 16 IT Based Innovations in Every Business Function uProduct Design uProcurement Systems uManufacturing Systems uSales and Marketing uDelivery Systems uCustomer Service Systems uFinance Systems

17. CIS 465 - Fall 2000 - IT ChallengesPage 17 IT-Based Innovation uTelecommuting uValue Chain uProduct Design computer aided design (CAD)

18. CIS 465 - Fall 2000 - IT ChallengesPage 18 Computer-Aided Design uEnable designers to visualize how a product will look. uThe need to produce physical mock-ups has been significantly reduced. uOriginally applied in engineering and architecture, it is now being applied in other areas such as surgery, clothes design, and hairdressing.

19. CIS 465 - Fall 2000 - IT ChallengesPage 19 CAD in unexpected places

20. CIS 465 - Fall 2000 - IT ChallengesPage 20 Supply Chain Management uEDI (Electronic Data Interchange) is changing the entire model of supply chain management in businesses. uThe cost of processing simple transactions can be reduced by more than an order of magnitude (e.g. purchase orders from $55 ea. To $2.50 ea.). uSCM and EDI are essential ingredients to the transformation of relationships between suppliers and customers. uAmong the most notable initial applications was Baxter Healthcare where hospital supplies were ordered directly with computer terminals in hospital stock rooms.

21. The Basic Supply Chain Management Process

22. CIS 465 - Fall 2000 - IT ChallengesPage 22 Customers link to suppliers using EDI

23. CIS 465 - Fall 2000 - IT ChallengesPage 23 Manufacturing uComputer-integrated manufacturing (CIM) integrates the use of technology across the manufacturing process, not just the design phases. uThe information content of a product is the value that is added through use of information systems rather than not using them. uMass production techniques allows for mass customization.

24. CIS 465 - Fall 2000 - IT ChallengesPage 24 Mass Customization: Building a customized bicycle

25. CIS 465 - Fall 2000 - IT ChallengesPage 25 Sales and Marketing uIT has drastically changed the approach to marketing. uAmazon.com capitalizes on electronic commerce. uPoint of Sales (POS) systems provide new ways to affect marketing - e.g. linking information about the customer with the sale. Loyalty Cards at Supermarkets Ask for your Home Zip code Discreet observation and collection. BJ’s Wholesale Club product recall. uAll to better improve the addressability in marketing.

26. CIS 465 - Fall 2000 - IT ChallengesPage 26 The Four P’s of Marketing at Amazon.com PRODUCT Amazon.com offers 2.5 million books for sale. PRICE Although Amazon.com charges for delivery, it can offer deep discounts for some books because it does not have to pay for rent for retail stores and because its inventory costs are low. PLACE Customers buy books from their homes or offices instead of going to a book store. PROMOTION Amazon.com provides extensive background information about some books. It promotes its business be advertising on other Web sites and through traditional media such as radio.

27. CIS 465 - Fall 2000 - IT ChallengesPage 27 Delivery and Logistics Systems uDelivery (logistics) Systems transport materials where they are needed. uThe need for accurate and accessible information on where a product is located. U.S. Army experience in Gulf War Federal Express uNew products are being developed: Instead of delivering physical goods such as paper and forms, consider what can be delivered over the network. uConsider impact of Global Positioning Systems.

28. CIS 465 - Fall 2000 - IT ChallengesPage 28 Customer Service uThe need for information on a customer’s current status. uWork is still needed to integrate some voice- response systems with customer databases (e.g. Bank Help Centers). uHave the right information available when you need it. Optical Scan relevant documents uBe able to initiate transactions and process them immediately. E.g. Car Rental Returns

29. CIS 465 - Fall 2000 - IT ChallengesPage 29 Finance Systems uConsider how technology is being used to replace currency as a form of barter. uDirect Deposit Payroll. uSmart cards. uElectronic stock trading. uWeb-Based Real Estate Marketing (2% vs. 6%). uEliminate the “middleman” and commissions.

30. CIS 465 - Fall 2000 - IT ChallengesPage 30 Question? uHow have any of these innovations affected you? uCan you identify any IT-based innovations that have affected business functions? uWhy does the technology provide such innovation?

31. CIS 465 - Fall 2000 - IT ChallengesPage 31 Data Processing Progress

32. CIS 465 - Fall 2000 - IT ChallengesPage 32 Dramatic Progress in Processing Data uData Processing functions: capture, transmit, store, retrieve, manipulate, display uGreater Miniaturization, Speed, and Portability uGreater Connectivity and Convergence of Computing and Communications uGreater Use of Digitization and Multimedia uBetter Software Techniques and Interfaces with People

33. CIS 465 - Fall 2000 - IT ChallengesPage 33 Six Data Processing Functions Performed by IT FUNCTION: CAPTURE Definition: Obtain a representation of information in a form permitting it to be transmitted or stored Example: Keyboard, bar code scanner, document scanner, optical character recognition, sound recorder, video camera, voice recognition software FUNCTION: TRANSMIT Definition: Move information from one place to another Example: Broadcast radio, broadcast television via regional transmitters, cable TV, satellite broadcasts, telephone networks, data transmission networks for moving business data, fiber optic cable, fax machine, electronic mail, voice mail, internet FUNCTION: STORE Definition: Move information to a specific place for later retrieval Example: Paper, computer tape, floppy disk, hard disk, optical disk, CD-ROM, flash memory

34. CIS 465 - Fall 2000 - IT ChallengesPage 34 Six Data Processing Functions Performed by IT FUNCTION: RETRIEVE Definition: Find the specific information that is currently needed Example: Paper, computer tape, floppy disk, hard disk, optical disk, CD-ROM, flash memory FUNCTION: MANIPULATE Definition: Create new information from existing information through summarizing, sorting, rearranging, reformatting, or other types of calculations Example: Computer (plus software) FUNCTION: DISPLAY Definition: Show information to a person Example: Laser printer, computer screen

35. CIS 465 - Fall 2000 - IT ChallengesPage 35 Miniaturization: Comparison of a vacuum tube and an integrated circuit

36. CIS 465 - Fall 2000 - IT ChallengesPage 36 Progress in Memory Chip Capacity Since 1973 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 1 kilobit 4 kilobit 16 kilobit 64 kilobit 256 kilobit 1 megabit 4 megabit 16 megabit 64 megabit 256 megabit 1,024 4,096 16,384 65,536 262,144 1,048,576 4,194,304 16,777,216 67,108,864 268,435,456 Approximate date of widespread commercial availability Type of chip Capacity in number of bits

37. CIS 465 - Fall 2000 - IT ChallengesPage 37 Using a portable computer to give parking tickets

39. Convergence: GPS

40. CIS 465 - Fall 2000 - IT ChallengesPage 40 A leading edge flat panel monitor and a computer terminal from the 1980s

41. CIS 465 - Fall 2000 - IT ChallengesPage 41 The positive and negative impacts of technical change

42. CIS 465 - Fall 2000 - IT ChallengesPage 42 Obstacles When Applying IT uUnrealistic Expectations and Techno-Hype uDifficulty Building and Modifying IT-Based Systems uDifficulty Integrating IT-Based Systems uOrganizational Inertia and Resistance to Change uGenuine Difficulty anticipating what will Happen

43. CIS 465 - Fall 2000 - IT ChallengesPage 43 Reality Check! uWhat are some examples of “techno-hype” you have encountered? u Have you experienced any of these “obstacles” when applying IT?