E. Wainright Martin Carol V. Brown Daniel W. DeHayes Jeffrey A. Hoffer William C. Perkins MANAGINGINFORMATIONTECHNOLOGY FIFTH EDITION CHAPTER 1 MANAGING IT IN AN E-WORLD

© 2005 Pearson Prentice-Hall Chapter CHAPTER 1 M ANAGING IT IN AN E-W ORLD Information technology (IT) – computer technology (hardware and software) for processing and storing information, as well as communications technology for transmitting information Page 1

© 2005 Pearson Prentice-Hall Chapter Page 2 Managing IT in business today is very different from managing in a prebrowser world Business managers now expect:  Information on firm’s internal operations  Data about external market conditions  Automated personal organizers  Networks always available  Applications that are easy to use CHAPTER 1 M ANAGING IT IN AN E-W ORLD

© 2005 Pearson Prentice-Hall Chapter R ECENT I NFORMATION T ECHNOLOGY T RENDS Hard to predict trends due to rate of change in IT industry Consider several mis-predictions … Page 2

© 2005 Pearson Prentice-Hall Chapter This “telephone” has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us. - Western Union internal memo, 1876 I think there is a world market for maybe five computers. There is no reason anyone would want a computer in their home. 640K ought to be enough for anybody. Dell has a great business model, but that dog won’t scale. MISPREDICTIONS BY IT INDUSTRY LEADERS -Thomas Watson, chairman of IBM, 1943 But what [is a microchip] good for? -Engineer at the Advanced Computing Systems Division of IBM, Ken Olson, president, chairman, and founder of Digital Equipment Corp., Attributed to Bill Gates, chairman of Microsoft, John Shoemaker, head of Sun’s server division, 2000 Page 2

© 2005 Pearson Prentice-Hall Chapter : first IBM PC 1990s: PCs commonplace Now...  Easy-to-use operating system with graphical interface  Web browser ready  Point-and-click technology  Plays music and videos  Notebook versions common for business travel Computer Hardware: Faster, Smaller, Cheaper R ECENT I NFORMATION T ECHNOLOGY T RENDS Page 2

© 2005 Pearson Prentice-Hall Chapter Majority of microcomputers:  Microsoft Windows – operating system software  Microsoft Office Suite – productivity software Word processing Spreadsheet Database Presentation Web browser Computer Software: Standardized and Integrated R ECENT I NFORMATION T ECHNOLOGY T RENDS Page 3

© 2005 Pearson Prentice-Hall Chapter  Widely adopted by manufacturing and service firms of all sizes  Often tailored to specific industries  Integrate data across traditional and Web-based channels for internal use, customers, and suppliers Computer Software: Standardized and Integrated Enterprise system packages – software packages with integrated modules that pass common business transactions across groups, divisions, and national boundaries in “real time” R ECENT I NFORMATION T ECHNOLOGY T RENDS Page 3

© 2005 Pearson Prentice-Hall Chapter s:  Standards for browser applications and Internet communications (TCP/IP)  Fiber-optic lines used by more telecommunications providers  High-speed access (high-bandwidth lines) available both to businesses and home owners 2000:  Commonplace for company networks linked to the Internet 2003:  Home owners using modems to connect to cable lines or digital subscriber lines (DSL) via telephone lines Today:  More companies investing in wireless technology Computer Networks: High Bandwidth, Global, and Wireless R ECENT I NFORMATION T ECHNOLOGY T RENDS Page 3

© 2005 Pearson Prentice-Hall Chapter Consider: By 2000, more than half of U.S. business capital expenditures were for IT Today, IT can not only enable, but can also help shape business strategies R ECENT I NFORMATION T ECHNOLOGY T RENDS Page 4

© 2005 Pearson Prentice-Hall Chapter Three ways to compete (Porter, 1980):  Cost – by being a low-cost producer of a good or service  Differentiation – by offering products or services customers prefer due to superiority with innovativeness, image, quality, or customer service  Focus – competing on cost or differentiation within a specific market niche Traditional Ways to Compete R ECENT I NFORMATION T ECHNOLOGY T RENDS Page 3

© 2005 Pearson Prentice-Hall Chapter IT can help with cost  Examples: Automating transaction time Shortening order cycle time Providing operational information for decision making IT can help with differentiation  Examples: Giving sales personnel information to better serve customers Providing just-in-time supplies for customers Creating new information-based products Traditional Ways to Compete R ECENT I NFORMATION T ECHNOLOGY T RENDS Page 4

© 2005 Pearson Prentice-Hall Chapter Using the Internet  Examples: Entire travel industry restructured because of competition via the Internet Wal-Mart, Dell, and Lands’ End leverage Internet to compete Results: achieve additional cost savings, mass customize products, and reach even more customers New Ways to Compete R ECENT I NFORMATION T ECHNOLOGY T RENDS Page 4

© 2005 Pearson Prentice-Hall Chapter W ORKING IN AN E-W ORLD Business invests more in IT support for today’s knowledge workers IT infrastructure now must support workers anytime and anywhere Sales force personnel are now telecommuters Telecommuters – One who works from a location outside the firm’s regular offices and “commutes” via telecommunications lines in order to do his or her work Page 5

© 2005 Pearson Prentice-Hall Chapter Document sharing Software to support collaborative teamwork Videoconferencing More Productive Teams W ORKING IN AN E-W ORLD Page 5

© 2005 Pearson Prentice-Hall Chapter Virtual Organizations  Temporary alliances between organizations and individuals  Contracts often gain scarce expertise or cheaper labor costs  Some might have no real office; employees can be located anywhere Virtual Organizations and Free Agents W ORKING IN AN E-W ORLD Page 6

© 2005 Pearson Prentice-Hall Chapter Free Agents  Are telecommuters who do knowledge work without being at a specific location  Have specialized skills and IT linkages to work as independent contractors  Often post resumes and sell skills globally Virtual Organizations and Free Agents W ORKING IN AN E-W ORLD Page 6

© 2005 Pearson Prentice-Hall Chapter L IVING IN AN E-W ORLD Advantages  Fast, convenient communication with cell phones  Vast amounts of “free” information via the Internet Disadvantages  Loss of individual privacy  Vulnerability to computer crimes  Social inequalities due to lack of access to computers Page 6

© 2005 Pearson Prentice-Hall Chapter T HE IS M ANAGEMENT R OLE IN O RGANIZATIONS Information systems (IS) organization – department or unit that has primary responsibility for managing IT – hardware, software, networks, and IS professionals Page 6

© 2005 Pearson Prentice-Hall Chapter Accounting Era Back-office computer automation began with accounting 1950s to mid-1960s IS professionals were primary decision makers but reported into an accounting function Transaction processing automated with use of computers for single functions (transactions were aggregated and then processed in a single run or “batch” – magnetic tape storage) Figure 1.1 Five IS Management Eras T HE IS M ANAGEMENT R OLE IN O RGANIZATIONS Page 7

© 2005 Pearson Prentice-Hall Chapter Operational Era Computer automation expanded to other functions Began mid-1960s Business managers became more involved in systems decision making (as applications supported more business functions) Online systems were introduced for transaction processing (made possible by direct access storage devices using magnetic disks) Figure 1.1 Five IS Management Eras T HE IS M ANAGEMENT R OLE IN O RGANIZATIONS Page 7

© 2005 Pearson Prentice-Hall Chapter Information Era IT investments to support the knowledge worker Late 1970s – mid 1980s End users became direct users of computer applications using user- friendly mainframe and microcomputer tools Decision support systems that could “interact” with users were introduced (made possible by software tools developed for direct end-user computing) Figure 1.1 Five IS Management Eras T HE IS M ANAGEMENT R OLE IN O RGANIZATIONS Page 7

© 2005 Pearson Prentice-Hall Chapter Network Era IT investments in interenterprise systems Began mid-1980s Business managers began to take more of an “ownership” role in IT investments Computer networking enabled applications with business partners (custom-developed inter- organizational applications) Figure 1.1 Five IS Management Eras T HE IS M ANAGEMENT R OLE IN O RGANIZATIONS Page 7

© 2005 Pearson Prentice-Hall Chapter Internet Era IT investments to support new kinds of e-business Began mid-1990s with Web browser Top management has taken a leadership role in IT decision making to ensure that IT investments are strategically aligned with the business The Internet and Web- based applications provide a global reach to customers and business partners (enabled by a standard communication protocol and standard Web browswer) Figure 1.1 Five IS Management Eras T HE IS M ANAGEMENT R OLE IN O RGANIZATIONS Page 7

© 2005 Pearson Prentice-Hall Chapter Figure 1.2 Three IT Assets Managing the IT Assets T HE IS M ANAGEMENT R OLE IN O RGANIZATIONS Page 8

© 2005 Pearson Prentice-Hall Chapter Figure 1.3 Enterprise IT Architecture (Based on Weil and Broadbent, 1998) Managing the IT Assets Page 9

© 2005 Pearson Prentice-Hall Chapter T HE IS M ANAGEMENT R OLE IN O RGANIZATIONS People Roles IS Leaders Other IS Managers IS Professionals Business Managers End Users Page 10

© 2005 Pearson Prentice-Hall Chapter T HE IS M ANAGEMENT R OLE IN O RGANIZATIONS People Roles IS Leaders Chief Information Officer (CIO) – a firm’s high-level general IT asset manager with both technology and business leadership experience who, together with the executive management team, plans for integration of IT for strategic advantage Page 10

© 2005 Pearson Prentice-Hall Chapter T HE IS M ANAGEMENT R OLE IN O RGANIZATIONS People Roles Other IS Managers … accountable for:  Data centers  Network operations  New applications development Page 10

© 2005 Pearson Prentice-Hall Chapter T HE IS M ANAGEMENT R OLE IN O RGANIZATIONS People Roles IS Professionals … include:  Programmers  Software engineers  Systems analysts  Database developers  Web developers  LAN administrators  Technical support specialists Page 10

© 2005 Pearson Prentice-Hall Chapter T HE IS M ANAGEMENT R OLE IN O RGANIZATIONS People Roles Business Managers …  Are internal customers of the IT organization  Need to be IT-savvy  May jointly lead strategic IT projects  Provide other IT-related roles: Serve on committees to prioritize and approve IT requests Act as sponsor or “owner” of an IT project Serve as process or functional expert on project team Participate in planning and execution of IT implementation Page 11

© 2005 Pearson Prentice-Hall Chapter T HE IS M ANAGEMENT R OLE IN O RGANIZATIONS People Roles End Users …  Provide business expertise to project teams  Participate in redesign of business processes  Give feedback to prototype screens and reports during system development  Help gather customer input when they are directly affected by IT project Page 11