Technology is transforming organizations in several ways: 1) The internet is lowering barriers to entry for new firms and creating substitutes for traditional businesses. 2) E-commerce is growing rapidly in India and around the world, with online retail in India expected to reach $7 billion by 2015. 3) Companies like Dell have implemented lean manufacturing techniques like building custom PCs based on online orders with little inventory, improving turnover. 4) These changes are increasing the manageable span of control for managers by reducing coordination costs and the need for some decision makers. However, new manager roles focusing on system design will also be needed.

2. 1 -
2

3. Management Information
Systems
Unit 1: Organization & Information Systems

4. Chapter 1
Changing Environment and its
impact on Business
Can we say
Technology Transforms the
Organization ?!!

5. 1 -
5
What’s my return on investment
on e-commerce?
Are you crazy? This is the
Columbus of the New World.
What was his ROI?
- Andrew Grove, Intel Chairman

6. Some Numbers 1/2
 The online retail industry is
expected to touch INR 7000 crore by
2015 (from current INR 2000 crore)
 The annual growth of online
transactions is 50% every year
 Over 65% of Mumbai population
and 45% of Delhi Population shop
online
1 -
6

7. Some Numbers 2/2
 By June 2010, More than 99 million
businesses worldwide had dotcom
Internet sites registered
 The Single’s Day (November 11, 2011)
created a history for China’s online
businesses with 10 million orders
 Thailand online shopping trends show
a rise of nearly 60%
 Many Fortune 500 companies now
have Facebook pages
Prepared and Presented by Prashant P Jani 1 - 7

8. Value Chain - Primary
In-bound
Operations
Outbound
Marketing/Service
1 -
8

9. Value Chain – Secondary
1 -
9
HR
Purchase
Finance
Legal

10. Prepared and Presented by Prashant P Jani
1 -
10

11. Web and Competitiveness
 The Internet has affected the five
forces by
◦ Lowering entry barriers for new firms
◦ Creating substitutes for traditional
businesses (Stock trading and music)
◦ Creating new markets that change the
way buyers and supplies interact
 Amazon.com has no physical stores and
hence a smaller infrastructure which is
easier to manage
1 -
11

12. Business Today
Manufacturing
and production
Accounting and
finance
Engineering
and
research
Supply chain management:
procurement, distribution, and
logistics
Customer relationship
management:
Marketing, Sales, Customer
Service
1 -
12

13. The Challenges of Change
 Within organizations
 Organizational structure
 Interorganizational relations
 The economy
 Education
 National development
1 -
13

14. Metrics for Business Impact
 Market share
 Number of markets in which a
firm participates
 Number of new markets
 Sales growth
 Size of the average sale
 Sales per employee
Prepared and Presented by Prashant P Jani
1 -
14

15. Lean and Agile
Manufacturing, Mass
Customization
 The Dell Model
◦ Phone and Internet orders
◦ Little or no in-process inventory
◦ No finished goods inventory
◦ Purchasing agreements with
companies, universities, and
government agencies
 Customized Web ordering pages
Prepared and Presented by Prashant P Jani
1 -
15

16. Prepared and Presented by Prashant P Jani
1 -
16

17. Dell’s Inventory Turnover
DataYear Inventory Turnover Week's Inventory
1992 4.79 10.856
1993 5.16 10.078
1994 9.4 5.532
1995 9.8 5.306
1996 24.2 2.149
1997 41.7 1.247
1998 52.40 0.992
1999 52.40 0.992
2000 51.4 1.012
2001 63.50 .819
1 -
17

18. The Impact
 Will increase the size of the
‘manageable’ span of control for
managers by decreasing the costs
and difficulties of information
handling (and thus reducing the
costs of coordination)
1 -
18

19. The Impact
 The more efficient automated systems will
eliminate the need for many decision makers
 But it will also generate the need for managers
who will be more nearly of the system designer
than the system operator
 In this new role, the manager’s capabilities will be
greatly extended both by quality of information
available to him and by the versatility of the new
tools for decision making.
 He will be more concerned with studying how he
can best structure his company to its environment
and thus improve its competitive posture
competitive posture
1 -
19

20. Campus Overview
907/A
Uvarshad, Gandhinagar
Highway, Ahmedabad –
382422.
Ahmedabad Kolkata
Infinity
Benchmark, 10th
Floor, Plot G1,
Block EP & GP,
Sector V, Salt-
Lake,
Kolkata – 700091.
Mumbai
Goldline Business
Centre Linkway
Estate,
Next to Chincholi
Fire Brigade, Malad
(West), Mumbai –
400 064.

21. 1 -
21