1 MANAGING THE DIGITAL FIRM c  h  a  p  t  e  r
<ul><li>ANALYZE ROLE OF INFORMATION SYSTEMS IN BUSINESS ENVIRONMENT </li></ul><ul><li>DEFINE INFORMATION SYSTEM, COMPUTER ...
LEARNING OBJECTIVES <ul><li>ASSESS DIGITAL FIRM, ELECTRONIC COMMERCE, ELECTRONIC BUSINESS, INTERNET TECHNOLOGY </li></ul><...
MANAGEMENT CHALLENGES <ul><li>WHY INFORMATION SYSTEMS? </li></ul><ul><li>CONTEMPORARY APPROACHES TO INFORMATION SYSTEMS </...
MANAGEMENT CHALLENGES <ul><li>1. DESIGN COMPETITIVE & EFFICIENT SYSTEMS </li></ul><ul><li>2. UNDERSTAND SYSTEM REQUIREMENT...
MANAGEMENT CHALLENGES <ul><li>4. DETERMINE BUSINESS VALUE OF INFORMATION SYSTEMS </li></ul><ul><li>5. DESIGN SYSTEMS PEOPL...
THE CHANGING BUSINESS ENVIRONMENT <ul><li>GLOBALIZATION </li></ul><ul><li>INDUSTRIAL ECONOMIES </li></ul><ul><li>TRANSFORM...
GLOBALIZATION <ul><li>MANAGEMENT & CONTROL </li></ul><ul><li>COMPETITION IN WORLD MARKETS </li></ul><ul><li>GLOBAL WORK GR...
INDUSTRIAL ECONOMIES <ul><li>KNOWLEDGE-BASED ECONOMIES </li></ul><ul><li>PRODUCTIVITY </li></ul><ul><li>NEW PRODUCTS & SER...
TRANSFORMATION OF ENTERPRISE <ul><li>FLATTENING </li></ul><ul><li>DECENTRALIZATION </li></ul><ul><li>FLEXIBILITY </li></ul...
EMERGENCE OF THE  DIGITAL FIRM <ul><li>DIGITALLY-ENABLED RELATIONSHIPS WITH CUSTOMERS, SUPPLIERS, EMPLOYEES </li></ul><ul>...
LABOR FORCE COMPOSITION 1900-1997 0% 10% 20% 30% 40% 50% 60% 70% 1900 1910 1920 1930 1940 1950 1960 1970 1980 1997 YEAR % ...
SYSTEM INPUT OUTPUT PROCESS FEEDBACK
FUNCTIONS OF AN  INFORMATION SYSTEM INPUT OUTPUT PROCESS FEEDBACK INFORMATION SYSTEM ENVIRONMENT Customers  Suppliers   Re...
DATA & INFORMATION <ul><li>DATA:  STREAMS OF RAW FACTS REPRESENTING EVENTS SUCH AS BUSINESS TRANSACTIONS </li></ul><ul><li...
COMPUTER-BASED INFORMATION SYSTEMS  (CBIS) <ul><li>FORMAL SYSTEMS </li></ul><ul><li>FIXED DEFINITIONS OF DATA, PROCEDURES ...
INFORMATION SYSTEMS ORGANIZATIONS TECHNOLOGY MANAGEMENT INFORMATION SYSTEMS
ORGANIZATIONS <ul><li>PEOPLE:  Managers, knowledge workers, data workers, production or service workers </li></ul><ul><li>...
ORGANIZATIONS <ul><li>OPERATING PROCEDURES:  Standard Operating Procedures  (SOP),  rules for action </li></ul><ul><li>POL...
MAJOR  BUSINESS FUNCTIONS <ul><li>SALES & MARKETING </li></ul><ul><li>MANUFACTURING </li></ul><ul><li>FINANCE </li></ul><u...
COMPUTER  TECHNOLOGY <ul><li>HARDWARE </li></ul><ul><li>SOFTWARE </li></ul><ul><li>STORAGE </li></ul><ul><li>COMMUNICATION...
APPROACHES TO INFO SYSTEMS BEHAVIORAL APPROACHES SOCIOLOGY POLITICAL SCIENCE PSYCHOLOGY COMPUTER  SCIENCE OPERATIONS  RESE...
SOCIOTECHNICAL PERSPECTIVE <ul><li>OPTIMIZE SYSTEM PERFORMANCE: </li></ul><ul><li>TECHNOLOGY & ORGANIZATION MUTUALLY ADJUS...
SYSTEM INTERDEPENDENCE BUSINESS Strategy Rules Procedures ORGANIZATION  INFORMATION SYSTEM HARDWARE SOFTWARE DATABASE TELE...
<ul><li>1950s:  TECHNICAL CHANGES </li></ul><ul><li>60s-70s:  MANAGERIAL  CONTROL </li></ul><ul><li>80s-90s:  INSTITUTIONA...
WHAT YOU CAN DO ON THE INTERNET <ul><li>COMMUNICATE & COLLABORATE </li></ul><ul><li>ACCESS INFORMATION </li></ul><ul><li>D...
NEW OPTIONS FOR ORGANIZATIONAL DESIGN <ul><li>FLATTENING ORGANIZATIONS </li></ul><ul><li>SEPARATING WORK FROM LOCATION </l...
THE DIGITAL FIRM <ul><li>ELECTRONIC COMMERCE </li></ul><ul><li>ELECTRONIC BUSINESS </li></ul><ul><li>ELECTRONIC MARKET:  I...
ELECTRONIC COMMERCE <ul><li>INTERNET LINKS BUYERS, SELLERS </li></ul><ul><li>LOWERS TRANSACTION COSTS </li></ul><ul><li>GO...
ELECTRONIC BUSINESS <ul><li>INTRANET:  Business builds private, secure network </li></ul><ul><li>E-MAIL, WEB DOCUMENTS, GR...
1 MANAGING THE DIGITAL FIRM c  h  a  p  t  e  r
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Managing the digital firm

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Managing the digital firm

  1. 1. 1 MANAGING THE DIGITAL FIRM c h a p t e r
  2. 2. <ul><li>ANALYZE ROLE OF INFORMATION SYSTEMS IN BUSINESS ENVIRONMENT </li></ul><ul><li>DEFINE INFORMATION SYSTEM, COMPUTER LITERACY, INFORMATION SYSTEMS LITERACY </li></ul><ul><li>EXPLAIN HOW INFORMATION SYSTEMS TRANSFORM ORGANIZATION & MANAGEMENT </li></ul><ul><li>* </li></ul>LEARNING OBJECTIVES
  3. 3. LEARNING OBJECTIVES <ul><li>ASSESS DIGITAL FIRM, ELECTRONIC COMMERCE, ELECTRONIC BUSINESS, INTERNET TECHNOLOGY </li></ul><ul><li>IDENTIFY MANAGEMENT CHALLENGES TO BUILDING, USING INFORMATION SYSTEMS </li></ul><ul><li>* </li></ul>
  4. 4. MANAGEMENT CHALLENGES <ul><li>WHY INFORMATION SYSTEMS? </li></ul><ul><li>CONTEMPORARY APPROACHES TO INFORMATION SYSTEMS </li></ul><ul><li>ROLE OF INFORMATION SYSTEMS </li></ul><ul><li>USING INFORMATION SYSTEMS </li></ul><ul><li>* </li></ul>
  5. 5. MANAGEMENT CHALLENGES <ul><li>1. DESIGN COMPETITIVE & EFFICIENT SYSTEMS </li></ul><ul><li>2. UNDERSTAND SYSTEM REQUIREMENTS OF GLOBAL BUSINESS ENVIRONMENT </li></ul><ul><li>3. CREATE INFORMATION ARCHITECTURE THAT SUPPORTS ORGANIZATION’S GOALS </li></ul><ul><li>* </li></ul>
  6. 6. MANAGEMENT CHALLENGES <ul><li>4. DETERMINE BUSINESS VALUE OF INFORMATION SYSTEMS </li></ul><ul><li>5. DESIGN SYSTEMS PEOPLE CAN CONTROL, UNDERSTAND & USE IN A SOCIALLY, ETHICALLY RESPONSIBLE MANNER </li></ul><ul><li>* </li></ul>
  7. 7. THE CHANGING BUSINESS ENVIRONMENT <ul><li>GLOBALIZATION </li></ul><ul><li>INDUSTRIAL ECONOMIES </li></ul><ul><li>TRANSFORMATION OF THE ENTERPRISE </li></ul><ul><li>* </li></ul>
  8. 8. GLOBALIZATION <ul><li>MANAGEMENT & CONTROL </li></ul><ul><li>COMPETITION IN WORLD MARKETS </li></ul><ul><li>GLOBAL WORK GROUPS </li></ul><ul><li>GLOBAL DELIVERY SYSTEMS </li></ul><ul><li>* </li></ul>
  9. 9. INDUSTRIAL ECONOMIES <ul><li>KNOWLEDGE-BASED ECONOMIES </li></ul><ul><li>PRODUCTIVITY </li></ul><ul><li>NEW PRODUCTS & SERVICES </li></ul><ul><li>KNOWLEDGE AS AN ASSET </li></ul><ul><li>TIME-BASED COMPETITION </li></ul><ul><li>SHORTER PRODUCT LIFE </li></ul><ul><li>TURBULENT ENVIRONMENT </li></ul><ul><li>LIMITED EMPLOYEE KNOWLEDGE BASE </li></ul><ul><li>* </li></ul>
  10. 10. TRANSFORMATION OF ENTERPRISE <ul><li>FLATTENING </li></ul><ul><li>DECENTRALIZATION </li></ul><ul><li>FLEXIBILITY </li></ul><ul><li>LOCATION INDEPENDENCE </li></ul><ul><li>LOW TRANSACTION COSTS </li></ul><ul><li>EMPOWERMENT </li></ul><ul><li>COLLABORATIVE WORK </li></ul><ul><li>* </li></ul>
  11. 11. EMERGENCE OF THE DIGITAL FIRM <ul><li>DIGITALLY-ENABLED RELATIONSHIPS WITH CUSTOMERS, SUPPLIERS, EMPLOYEES </li></ul><ul><li>CORE BUSINESS PROCESSES VIA DIGITAL NETWORKS </li></ul><ul><li>DIGITAL MANAGEMENT OF KEY ASSETS </li></ul><ul><li>RAPID SENSING & RESPONDING TO CHANGE </li></ul><ul><li>* </li></ul>
  12. 12. LABOR FORCE COMPOSITION 1900-1997 0% 10% 20% 30% 40% 50% 60% 70% 1900 1910 1920 1930 1940 1950 1960 1970 1980 1997 YEAR % SERVICE % WHITE COLLAR % BLUE COLLAR % FARMING
  13. 13. SYSTEM INPUT OUTPUT PROCESS FEEDBACK
  14. 14. FUNCTIONS OF AN INFORMATION SYSTEM INPUT OUTPUT PROCESS FEEDBACK INFORMATION SYSTEM ENVIRONMENT Customers Suppliers Regulatory Stockholders Competitors Agencies ORGANIZATION
  15. 15. DATA & INFORMATION <ul><li>DATA: STREAMS OF RAW FACTS REPRESENTING EVENTS SUCH AS BUSINESS TRANSACTIONS </li></ul><ul><li>INFORMATION: CLUSTERS OF FACTS MEANINGFUL & USEFUL TO HUMAN BEINGS IN PROCESSES SUCH AS MAKING DECISIONS </li></ul><ul><li>* </li></ul>
  16. 16. COMPUTER-BASED INFORMATION SYSTEMS (CBIS) <ul><li>FORMAL SYSTEMS </li></ul><ul><li>FIXED DEFINITIONS OF DATA, PROCEDURES </li></ul><ul><li>COLLECTING, STORING, PROCESSING, DISSEMINATING, USING DATA </li></ul><ul><li>* </li></ul>
  17. 17. INFORMATION SYSTEMS ORGANIZATIONS TECHNOLOGY MANAGEMENT INFORMATION SYSTEMS
  18. 18. ORGANIZATIONS <ul><li>PEOPLE: Managers, knowledge workers, data workers, production or service workers </li></ul><ul><li>STRUCTURE: Organization chart, groups of specialists, products, geography </li></ul><ul><li>* </li></ul>
  19. 19. ORGANIZATIONS <ul><li>OPERATING PROCEDURES: Standard Operating Procedures (SOP), rules for action </li></ul><ul><li>POLITICS: Power to persuade, get things done </li></ul><ul><li>CULTURE: Customs of behavior </li></ul><ul><li>* </li></ul>
  20. 20. MAJOR BUSINESS FUNCTIONS <ul><li>SALES & MARKETING </li></ul><ul><li>MANUFACTURING </li></ul><ul><li>FINANCE </li></ul><ul><li>ACCOUNTING </li></ul><ul><li>HUMAN RESOURCES </li></ul><ul><li>* </li></ul>
  21. 21. COMPUTER TECHNOLOGY <ul><li>HARDWARE </li></ul><ul><li>SOFTWARE </li></ul><ul><li>STORAGE </li></ul><ul><li>COMMUNICATIONS </li></ul><ul><li>NETWORKS </li></ul><ul><li>* </li></ul>
  22. 22. APPROACHES TO INFO SYSTEMS BEHAVIORAL APPROACHES SOCIOLOGY POLITICAL SCIENCE PSYCHOLOGY COMPUTER SCIENCE OPERATIONS RESEARCH MANAGEMENT SCIENCE TECHNICAL APPROACHES MIS
  23. 23. SOCIOTECHNICAL PERSPECTIVE <ul><li>OPTIMIZE SYSTEM PERFORMANCE: </li></ul><ul><li>TECHNOLOGY & ORGANIZATION MUTUALLY ADJUST TO </li></ul><ul><li>ONE ANOTHER </li></ul><ul><li>UNTIL FIT IS SATISFACTORY </li></ul><ul><li>* </li></ul>SOURCE: Liker, et al, 1987
  24. 24. SYSTEM INTERDEPENDENCE BUSINESS Strategy Rules Procedures ORGANIZATION INFORMATION SYSTEM HARDWARE SOFTWARE DATABASE TELE-COMMUNICATIONS INTERDEPENDENCE
  25. 25. <ul><li>1950s: TECHNICAL CHANGES </li></ul><ul><li>60s-70s: MANAGERIAL CONTROL </li></ul><ul><li>80s-90s: INSTITUTIONAL CORE ACTIVITIES </li></ul><ul><li>GROWING IMPORTANCE </li></ul><ul><li>* </li></ul>SCOPE OF INFO SYSTEMS
  26. 26. WHAT YOU CAN DO ON THE INTERNET <ul><li>COMMUNICATE & COLLABORATE </li></ul><ul><li>ACCESS INFORMATION </li></ul><ul><li>DISCUSS </li></ul><ul><li>OBTAIN INFORMATION </li></ul><ul><li>ENTERTAIN </li></ul><ul><li>TRANSACT BUSINESS </li></ul><ul><li>* </li></ul>
  27. 27. NEW OPTIONS FOR ORGANIZATIONAL DESIGN <ul><li>FLATTENING ORGANIZATIONS </li></ul><ul><li>SEPARATING WORK FROM LOCATION </li></ul><ul><li>REORGANIZING WORK-FLOWS </li></ul><ul><li>INCREASING FLEXIBILITY </li></ul><ul><li>REDEFINING ORGANIZATIONAL BOUNDARIES </li></ul><ul><li>* </li></ul>
  28. 28. THE DIGITAL FIRM <ul><li>ELECTRONIC COMMERCE </li></ul><ul><li>ELECTRONIC BUSINESS </li></ul><ul><li>ELECTRONIC MARKET: Information system links buyers & sellers to exchange information, products, services, payments </li></ul><ul><li>* </li></ul>
  29. 29. ELECTRONIC COMMERCE <ul><li>INTERNET LINKS BUYERS, SELLERS </li></ul><ul><li>LOWERS TRANSACTION COSTS </li></ul><ul><li>GOODS & SERVICES ADVERTISED, BOUGHT, EXCHANGED WORLDWIDE </li></ul><ul><li>BUSINESS-TO-BUSINESS TRANSACTIONS INCREASING </li></ul><ul><li>* </li></ul>
  30. 30. ELECTRONIC BUSINESS <ul><li>INTRANET: Business builds private, secure network </li></ul><ul><li>E-MAIL, WEB DOCUMENTS, GROUP SOFTWARE: Extends effective communication & control </li></ul><ul><li>EXTRANET: Extension of Intranet to authorized external users </li></ul><ul><li>* </li></ul>
  31. 31. 1 MANAGING THE DIGITAL FIRM c h a p t e r
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