Disruptive Technology How can a company like Polaroid go bankrupt? Digital Darwinism – implies that organizations which cannot adapt to the new demands placed on them for surviving in the information age are doomed to extinction If Polaroid executives had used Porter’s Five Forces analysis would they have discovered the threat of substitute products of the digital camera? What could they have done to combat this threat?

Disruptive Versus Sustaining Technology What do steamboats, transistor radios, and Intel’s 8088 processor all have in common? Disruptive technology – a new way of doing things that initially does not meet the needs of customers Sustaining technology – produces an improved product customers are eager to buy What do steamboats, transistor radios, and Intel’s 8088 processor all have in common? Ans: they are all disruptive technologies CLASSROOM EXERCISE Total Disruptive Break your students into groups and ask them to identify the primary differences between disruptive and sustaining technologies, along with several current examples of each Disruptive technologies: Disruptive technologies redefine the competitive playing fields of their respective markets Disruptive technologies tend to open new markets and destroy old ones Disruptive technologies typically cut into the low end of the marketplace and eventually evolve to displace high-end competitors and their reigning technologies Sustaining technologies: Sustaining technologies tend to provide us with better, faster, and cheaper products in established markets Sustaining technologies virtually never lead in markets opened by new and disruptive technologies

The Internet – Business Disruption One of the biggest forces changing business is the Internet Organizations must be able to transform as markets, economic environments, and technologies change Focusing on the unexpected allows an organization to capitalize on the opportunity for new business growth from a disruptive technology Do your students agree that the Internet is an example of a disruptive technology? When it was first introduced would they consider it a form of disruptive technology? CLASSROOM EXERCISE Finding Innovation Innovation, new ideas, and new technology are exciting. It is currently estimated that everything we know technically will represent 1 percent of all technology in 2050. Break your students into groups and ask them to search the Internet for the most exciting form of innovation that is going to hit our market and change our lives over the next ten years. Have your students present their findings to the class and offer a small prize to the winner. A few examples include: Computers that offer smells, click on a perfume and the scent permeates from your computer, movie theatres will offer smells that correspond to the movie Electronic toilets – analyze output and let you know if you getting sick days before the cold actually hits. Great for rest homes and hospitals Planes the size of small ships that offer shopping and restaurants What's For Dinner? Just Call Your Refrigerator – show your student’s the kitchen of the future http://www.geconsumerproducts.com/pressroom/press_releases/company/company/kitchenoffuture_article_06.htm

The Internet Network of Networks, established in 1969 by U. S. Defense Dept. for research. Number of users doubling each year for most of middle to late 90s. Now doubles about every two years. “.com” s have taken over. No central authority, originally for nuclear disaster reasons. Taxes, gambling, etc.? E-mail, Usenet, FTP, telnet: WWW has all of these. 23

What is the Internet? A Physical Entity... server client A Physical Entity... a collection of thousands of computer networks server client main frame main frame server client server client 24

What is the Internet? Recognized Standards (TCP/IP) server client Recognized Standards (TCP/IP) protocols for transferring information across various computer platforms Apple Talk server client IBM Windows main frame Vax VMS main frame server client server client IBM VM/CMS Sun Unix IBM Windows 26

How many Users? 147 Million as of 9/98, 195 million as of 8/99, 378 million as of 9/00, 580 million as of 5/02, 1.08 billion as of 2005, 1.83 billion as of 2010 (www.clickz.com, then click on “stats” and then “Web Worldwide”). 2.1 billion by 2012?

How many Servers? 3.2 Million as of 9/98, 7 Million as of 8/99, 21 Million as of 9/00, 37 Million as of 7/02, 143 million as of 10/07, 206 million as of 3/10 (www.netcraft.com, then go to Web Survery survey).

Getting Around the WWW IP Address. Four-part numeric address for any device connected to the Internet. Only a few billion possibilities. IPng on its way - trillion. DNS: Domain Name System. Translates IP into meaningful site name and vice versa. TLD, or “top level domains”, are things like “.com”. In the ballpark of $9 (and increasingly less) a year for registration.

E-Business How do e-commerce and e-business differ? E-commerce – the buying and selling of goods and services over the Internet E-business – the conducting of business on the Internet including, not only buying and selling, but also serving customers and collaborating with business partners Ask your students to differentiate between e-commerce and e-business E-commerce refers only to online transactions E-business refers to online transactions, serving customers and collaborating with business partners On July 18,2005 media conglomerate News Corp. bought Intermix Media, the company that owns MySpace and about 30 other sites, for $580 million in cash. Los Angeles-based Intermix owns 53% of MySpace and plans to buy the rest. It will become part of News Corp.'s new Fox Interactive Media unit, which was created on July 15, 2005 and also is based in L.A. Since MySpace is a social networking site, why would a business conglomerate such as News Corporation want to purchase it for $580 million?

THE IMPORTANCE OF THE E-BUSINESS MODEL Basic Internet business models Building a Web site does not mean that customers will come Traditional means of customer acquisition such as advertising, promotions, and public relations are just as important with a Web site Once customers are attracted, a Web site must create a “buzz” Discuss the Fruit of the Loom (FOL) example on page 139 Class Activity: Ask your students to compile a list of several examples of each type of e-business model Ans: B2B: grainger.com B2C: carfax.com C2B: ideas.com C2C: eBay.com

CHALLENGES OF THE E-BUSINESS MODELS Three primary challenges include: Security concerns 60% of Internet users consider the Internet unsafe Taxation Internet remains free of traditional forms of taxation Consumer protection Unsolicited goods and communications Illegal or harmful goods, services, and content Insufficient information about goods or their suppliers Invasion of privacy Cyberfraud Ask your students to identify additional challenges for e-business models? Ans: High cost of developing a dynamic Web site

Teams, Partnerships, and Alliances Information technology can make a business partnership easier to establish and manage Information partnership – occurs when two or more organizations cooperate by integrating their IT systems, thereby providing customers with the best of what each can offer The Internet has dramatically increased the ease and availability for IT-enabled organizational alliances and partnerships Provide a few examples of how the Internet has enabled information partnerships? A good example is Amazon.com The company developed a profitable business segment by providing e-business outsourcing services to other retailers who use Amazon’s Web site software Retailers partnering with Amazon.com include Marshall Fields, Office Depot, and Target

Collaboration Systems Collaboration solves specific business tasks such as telecommuting, online meetings, deploying applications, and remote project and sales management Collaboration system – an IT-based set of tools that supports the work of teams by facilitating the sharing and flow of information Collaboration allows people, teams, and organizations to leverage and build upon the ideas and talents of staff, suppliers, customers, and business partners It involves a unique set of business challenges that: Include complex interactions between people who may be in different locations and desire to work across function and discipline areas Require flexibility in work process and the ability to involve others quickly and easily Create and share information rapidly and effortlessly within a team Increasingly, organizations are extending their focus from internal operations like planning and scheduling, enterprise resource planning and sales force automation, toward operations beyond their own four walls with external customers and suppliers This chapter focuses on the need for collaboration, the technology that supports collaboration, and collaboration trends

Collaboration Systems Collaboration systems include: Knowledge management systems Content management systems Workflow management systems Groupware systems Knowledge management system – supports the capturing and use of an organization’s “know-how” Content management system (CMS) – provides tools to manage the creation, storage, editing, and publication of information in a collaborative environment Workflow management system – controls the movement of work through a business process Groupware – software that supports team interaction and dynamics including calendaring, scheduling, and videoconferencing

Knowledge Management Systems Knowledge management (KM) – involves capturing, classifying, evaluating, retrieving, and sharing information assets in a way that provides context for effective decisions and actions Knowledge management system – supports the capturing and use of an organization’s “know-how” Why is knowledge one of the real competitive advantages? It is difficult to duplicate knowledge It can take years to acquire It is a personal asset What if an organization could capture all of a persons knowledge using technology? You would no longer need that person in the organization

Explicit and Tacit Knowledge The following are two best practices for transferring or recreating tacit knowledge Shadowing – less experienced staff observe more experienced staff to learn how their more experienced counterparts approach their work Joint problem solving – a novice and expert work together on a project The difference between shadowing and joint problem solving is that shadowing is more passive Joint problem solving allows the expert and the novice to work hand-in-hand on a task Why would shadowing be appropriate? When would joint-problem solving be appropriate?

Content Management Content management system (CMS) – provides tools to manage the creation, storage, editing, and publication of information in a collaborative environment CMS marketplace includes: Document management system (DMS) Digital asset management system (DAM) Web content management system (WCM) BMW Group Switzerland accelerated personalized, real-time information about products, services, prices, and events to its dealers countrywide BMW uses a process that allows dealers to specify what information is seen by which employee, as well as to deliver marketing materials solely to members of the sales department, and technical specifications and support documents only to mechanics The enhanced personalization eliminates the chance that information is sent to the wrong dealership or to the wrong individual, which provides higher quality customer services Document management system (DMS) – supports the electronic capturing, storage, distribution, archival, and accessing of documents Digital asset management system (DAM) – similar to DMS, generally works with binary rather than text files, such as multimedia files types Web content management system (WCM) – adds an additional layer to document and digital asset management that enables publishing content both to intranets and to public Web sites

Workflow Management Systems Work activities can be performed in series or in parallel that involves people and automated computer systems Workflow – defines all the steps or business rules, from beginning to end, required for a business process Workflow management system – facilitates the automation and management of business processes and controls the movement of work through the business process NYC was experiencing a record number of claims, ranging from injuries resulting from slips on sidewalks to medical malpractice at hospitals NYC processes over 30,000 claims and incurs $250 million in claims costs annually NYC implemented a workflow management tool to process contracts and claims The system saved NYC $20 million Many workflow management systems allow the opportunity to measure and analyze the execution of the process

Workflow Management Systems Messaging-based workflow system – sends work assignments through an e-mail system Database-based workflow system – stores documents in a central location and automatically asks the team members to access the document when it is their turn to edit the document How could you use a messaging-based workflow system or database-based workflow system to complete a group project? Messaging-based workflow system would send an e-mail to each group member when it was their turn to edit the document. The student would then be responsible for finding the document to edit. Database-based workflow system would ask the student to edit the document, and supply the document to the student. Review the figure for workflow management system features and discuss how each feature could be used to complete a group project

Groupware Systems Groupware – software that supports team interaction and dynamics including calendaring, scheduling, and videoconferencing Lotus Notes and Toyota developed an intranet system to promote information sharing within the company and to raise productivity Groupware falls into two categories: Users of the groupware are working together at the same time or different times (time difference) Users are working together in the same place or in different places (physical location difference) Which is easier to overcome? Why?

Collaboration Trends E-mail is the dominant form of collaboration application, but real-time collaboration tools like instant messaging are creating a new communication dynamic Instant messaging - type of communications service that enables someone to create a kind of private chat room with another individual to communicate in real-time over the Internet Program features include: Web links Images Sounds Files Talk Streaming content Instant messaging

Wireless Fidelity (wi-fi) Wireless fidelity (wi-fi) – a means of linking computers using infrared or radio signals Common examples of wireless devices include: Cellular phones and pagers Global positioning systems (GPS) Cordless computer peripherals Home-entertainment-system control boxes Two-way radios Satellite television Wireless technologies are transforming how we live, work, and play Handheld devices are continuing to offer additional functionality, and cellular networks are advancing rapidly in their increased speed and throughput abilities These enabling technologies are fueling widespread adoption and creation of new and innovative ways to perform business Ask your students how many of them are currently using these types of wireless devices Ask your students to discuss additional types of wireless devices that they are currently using Ask your students to define additional types of wireless devices that they are not currently using

Advantages of Enterprise Mobility Wireless laptops facilitate emergency room registration so doctors can start working on the patients as soon as the medics wheel them into the hospital High-end tractors equipped with wireless sensors help farmers monitor everything from the weather to the amount of seed released

Bluetooth Bluetooth – an omnidirectional wireless technology that provides limited-range voice and data transmission over the unlicensed 2.4-GHz frequency band, allowing connections with a wide variety of fixed and portable devices that normally would have to be cabled together Since Bluetooth’s development in 1994 by the Swedish telecommunications company Ericsson, more than 1,800 companies worldwide have signed on to build products to the wireless specifications Bluetooth is named to honor a 10th century Viking Kind, Harold Bluetooth, who is credited with uniting Denmark and bringing order to the country

Radio Frequency Identification (RFID) Radio frequency identification (RFID) - use active or passive tags in the form of chips or smart labels that can store unique identifiers and relay this information to electronic readers RFID tag - contains a microchip and an antenna, and typically work by transmitting a serial number via radio waves to an electronic reader, which confirms the identity of a person or object bearing the tag Describe RFID and how it can be used to help make a supply chain more effective? Integrating RFID in the supply chain will change the way a companies operate from managing maintenance, combating theft, to augmenting Sarbanes-Oxley initiatives

Satellite Microware transmitter – commonly used to transmit network signals over great distances Sirius signed a contract with Howard Stern for $500 million over five years Why would Howard Stern move to satellite radio? Was the move successful?

Global Positioning System Global positioning system (GPS) – a device that determines current latitude, longitude, speed, and direction of movement Market for GPS services is at $5 billion with expectations for the demand to double over the next five years Geographic information system (GIS) – designed to work with information that can be shown on a map Many of the new autos today have GPS linked to maps that display in a screen on the dashboard GM’s OnStar Vehicle Diagnostics automatically performs hundreds of diagnostic checks on four key operating system in GM vehicles Customers receive an e-mail each month describing the current health of their vehicle Can you think of additional opportunities for businesses to use a GPS or GIS system?