Transcript Chapter 12: Enterprise & Global Management of e

Housekeeping
Power Point Demo?? – Thur or April 13
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Today – Chap 12
Thur – Share about chap 12 homework
Next Week – Spring Break
April 13 – Emerging Technology
April 15 – Long Boom Article
April 20, 22 – Ethics Project Discussion
April 27 – No class
April 29 – Prepare for Final
May 4 - Final
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IT - The Organization
and the Individual
Chapter 12
Learning Objectives
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Recognize the difficulties in managing
information resources.
Recognize information systems’
vulnerability and manage risk.
Identify the major aspects of the
economics of information technology.
Demonstrate how to define and measure
tangible information technology benefits.
Show how to evaluate intangible
information technology benefits.
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James A. O’Brien
Introduction to Information Systems
Eleventh Edition
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Chapter Objectives
• Identify several ways that information
technologies have affected the job of
managers in e-business companies.
• .Identify the seven major dimensions of
the e-business organization and explain
how they affect the success of ebusiness companies.
• Identify several cultural, political, and
geoeconomic challenges that confront
managers in the management of global ebusiness technologies.
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Copyright © 2002, The McGraw-Hill Companies, Inc. All rights reserved.
Evaluating Trends
Technology & Organizations
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Impact of new technologies on organizations:
• First, most organizations will perform existing
functions at decreasing costs over time and thus
become more efficient.
• Second, creative organizations will find new uses for
information technology—based on the improving priceto-performance ratio—and thus become more
effective.
• New and enhanced products and services will provide
competitive advantage to organizations that have the
creativity to exploit the increasing power of
information technology.
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Trend -Information -> Collaboration
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Today’s Internet focuses on access to and
delivery of information
Tomorrow’s Internet will support human
collaboration in an information-rich
environment
The Internet is global, and is creating a
global capability to build knowledge-based
communities
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The Productivity Paradox
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Over the last 50 years, organizations have
invested trillions of dollars in information
technology.
• Total worldwide annual spending on IT in 2000 was
two trillion dollars, and is expected to be over three
trillion dollars by 2004.
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Yet it is very hard to demonstrate that IT
investments really have increased outputs or
wages.
The discrepancy between measures of
investment in information technology and
measures of output at the national level is
described as the Productivity Paradox.
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Productivity
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Economists define productivity as outputs
divided by inputs.
• Outputs are calculated by multiplying units produced,
for example, number of automobiles, by their average
value.
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If inputs are measured simply as hours of work,
the resulting ratio of outputs to inputs is labor
productivity.
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If other inputs—investments and materials—are
included, the ratio is known as multifactor
productivity.
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James A. O’Brien
Eleventh Edition
Introduction to Information Systems
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Managing e-Business Technologies
Information Technology Developments
Customer Value
E-Business
•Agility, Flexibility
•Business Strategies
•Supply Chain
•Total Quality
Suppliers
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•Responsiveness
•Accountability
•Lower costs
•Global and enterprise
computing; intranets
•IT infrastructure
Business Partners
Copyright © 2002, The McGraw-Hill Companies, Inc. All rights reserved.
James A. O’Brien
Introduction to Information Systems
Eleventh Edition
11
The e-Business Organization
Organization
Structure
Business
Quality
Traditional
Organization
Improvement
Hierarchical
Business
E-Organization
Reengineering
Horizontal, networked
Incrementally Improving
Existing
Processes
Existing
Processes
Centralized
focus
Radically Redesigning
Business
Systems
Business
Everyone isSystems
a leader
People
and
Target
Culture
Any
Process
Vertical
decision making
Strategic
Delegated Business
authority
Processes
Processes
Collaboration rewarded
Potential
Coherence
10%-50%
Improvements
10%-50%
Improvements
Internal relevance
10-Fold
Improvements
10-Fold
Improvements
Customer
relevance
Individualistic
Low
Low
High
High
Leadership
Individuals rewarded
Payback
Knowledge
Risk
Alliances
Institutional
Ally with distant partners
Complement current gaps
Ally with competitors, customers
IT
and
Organizational
and
suppliers
Create
new
value New
Big
Job
Cuts;
Big
Job
Cuts;
New Jobs;
Jobs;
Same
Same Jobs
Jobs -- More
More Efficient
Efficient
What
Changes? IT and Work Simplification Major
Primary
Major Job
Job Redesign
Redesign
Governance
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Top-down
Distributed
Copyright © 2002, The McGraw-Hill Companies, Inc. All rights reserved.
James A. O’Brien
Introduction to Information Systems
Eleventh Edition
12
Example of organizational structure of an e-business enterprise
Consumer
Products
Business Unit
E-commerce
Business Unit
Shared IT
Support
Services
Business Unit
Shared Administrative
Support Services
Business Unit
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Global
Executive
Core
Industrial
Products
Business Unit
Financial
Services
Business Unit
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James A. O’Brien
Eleventh Edition
Introduction to Information Systems
13
e-Business Technology Management
e-Business
Technology
Management
Managing
e-Business IT
Strategy
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Managing
Application
Development &
Technology
Managing
the IT
Organization
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James A. O’Brien
Introduction to Information Systems
Eleventh Edition
14
Benefits Derived from Company IT Planning
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Reduced support costs
Reduced complexity
Expertise portability
Interoperability
Volume discounts
Reduced training costs
Information sharing
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Copyright © 2002, The McGraw-Hill Companies, Inc. All rights reserved.
James A. O’Brien
Introduction to Information Systems
Eleventh Edition
15
Global e-Business Strategies
International
-Autonomous
operations
-Region Specific
-Vertical Integration
-Specific Customers
-Captive
Manufacturing
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Global
-Global Sourcing
-Multiregional
-Horizontal Integration
-Some transparency of
customers and
production
Transactional
-Virtual e-Businesses
-World Markets
-Transparent
Manufacturing
-Global Supply Chain
-Global Alliances
Copyright © 2002, The McGraw-Hill Companies, Inc. All rights reserved.
James A. O’Brien
Introduction to Information Systems
Eleventh Edition
16
Business Drivers for Global e-Business
Global Customers
Global Products
Global Operations
Business
Drivers
for Global
e-Business
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Global Resources
Global Collaboration
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James A. O’Brien
Introduction to Information Systems
Eleventh Edition
17
Global IT Platform Issues
Global Infrastructure
•Global Data Access
•Regulated Access
•Transborder Data Flows
Global Systems Development Global Computing Facilities
•Local vs. Global Requirements
•Multilingual Needs
•Standardization of Data
•Scheduling Global Activities
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•Hardware acquisitions
•Import restrictions
•Software compatibility
•Local service
•Balancing workloads
•Lack of spare parts
Copyright © 2002, The McGraw-Hill Companies, Inc. All rights reserved.
James A. O’Brien
Introduction to Information Systems
Eleventh Edition
18
Chapter Summary
• e-Business technologies are changing the
distribution, relationships, resources, and
responsibilities of managers.
• High-quality information system performance
is dependent on extensive and meaningful
management and user involvement in the
governance and development of IT
applications.
• The organizational structure and roles of ebusiness companies are undergoing major
change as they strive to become customerfocused.
Irwin/McGraw-Hill
Copyright © 2002, The McGraw-Hill Companies, Inc. All rights reserved.
James A. O’Brien
Introduction to Information Systems
Eleventh Edition
19
Chapter Summary (cont)
• Managing global e-business technologies
includes:
– Dealing with cultural, political, and geoeconomic
challenges posed by various countries.
– Developing appropriate business and IT
strategies.
– Developing a portfolio of global e-business and
e-commerce applications and an Internet-based
technology platform to support them.
Irwin/McGraw-Hill
Copyright © 2002, The McGraw-Hill Companies, Inc. All rights reserved.