This document provides an overview of Chapter 1 of the course "Information Technology for Management". The 3-sentence summary is: The chapter discusses how businesses operate in the digital economy and how information systems and technology can support organizational performance and competitiveness by enabling activities, reducing costs, and improving decision-making. It also covers topics like social computing, networking, strategies for competitive advantage, and how organizations can respond to pressures in the business environment through information technology. The focus is on how IT can help counter environmental pressures and facilitate organizational change to boost performance.

1. COLLAGE OF BUSINESS AND ECONOMICS
DEPARTMENT OF INFORMATION TECHNOLOGY
(itm3171)
Prepared By: lecturer Issack M.
Tell: (+252- 612464664)
Email: issack7501@gmail.com

2. Course Number ITM3171
Course Title: Information Technology for management
Degree Program: BA Degree in Accounting and Finance
Module: IMT 01
Module No and Code: 01/3171
ETCTS Credits:
Credit Hours: 3
ABOUT THE COURSE

3. Chapter 1 –
IT Supports Organizational
Performance in Turbulent Business
Environments

4. Chapter Outline
• • 1.1 Doing Business in the Digital Economy
• • 1.2 Information Systems and Information
Technology (IT)
• • 1.3 Business Performance Management,
Business,Pressures, Organization Responses, and IT
Support
• 1.4Strategy for Competitive Advantage and IT
Support
• • 1.5 Social Computing and Networking

5. Learning Objectives
• 1. Describe characteristics of the digital economy and
• digital enterprises.
• 2. Define information systems, computer-based
• information systems and information technology.
• 3. Explain the relationships between performance,
• environmental pressures, organizational responses, and
• information technology.
• 4. Identify major pressures in the business environment
• and describe major organizational responses to them.
• 5. Describe adaptive enterprises and why they are ITdependent.
• 6. Explain the function and impacts of social
• computing and social-networking.
• 7. Understand the importance of learning about
• information technology.

6. The focus of the chapter is on the environmental business pressures that
are impacting organizational performance, and on the role of Information
Technology (IT) as support for organizational activities that counter the
environmental pressures.
A major role of IT is being an enabler and facilitator of organizational
activities, processes, and change for increased performance and
competitiveness.
CHAPTER OVERVIEW

7. What is the Digital Economy?
• Information &
entertainment products that
are digitized.
• Processes & services.

9. Digital Network Enterprise

10. 1. Doing Business in the Digital
Economy
• Digital enterprise refers to an organization that uses
computers and information systems (ISs) to perform or
support its activities.
The digital enterprise uses IT to accomplish one or more
of its basic objectives:
• Research and engage customers more effectively
• Boost employee productivity
• Improve operating efficiency

11. Digital economy refers to an economy
based on digital technologies

12. Electronic commerce
(e-commerce) is the
process of buying, selling,
transferring, or
exchanging products,
services, or information
via the Internet or other
networks.

14. • Business Model is a method
of doing business by which a
company can generate
revenue to sustain itself.
• The model spells out how the
company creates or adds
value in terms of the goods or
services the company
produces in the course of its
operations.

15. A business model is composed of the
following six elements:
• A description of all products and services the business will
offer
• A description of the business process required to make and
deliver the products and services
• A description of the customers to be served and the
company’s relationships with these customers, including what
constitutes value from the perspective of the customers
• A list of the resources required and the identification of which
ones are available, which will be developed in-house, and
which will need to be acquired
• A description of the organization’s supply chain
• A description of the revenues expected and profitability
expected

16. 2. Information Systems and Information
Technology
• Information System (IS) collects, processes, stores,
analyzes, and disseminates information for a specific
purpose. It includes inputs, processing, output and
control.
• Computer-based information system (CBIS) uses
computer technology to perform some or all of its
intended tasks.
• The basic components of an IS are hardware, software,
data, network, procedures (the set of instructions about
how to combine the above components in order to
process information and generate the desired output),
people.

17. IT has become the major facilitator of
business activities due to its vast
capabilities

18. These capabilities support six
business objectives:
• Improving productivity,
• Reducing costs,
• Improving decision making,
• Facilitating collaboration,
• Enhancing customer relationships and
• Developing new strategic applications.

19. 3. Business Performance Management,
Business Pressures, Organizational
Responses, and IT Support
• Organizations have to
manage their performance
and this is usually done in 4
steps which are illustrated in
the Business Performance
Management Cycle and IT
below. The four steps in their
totality are called Business
Performance Management
(BPM).

21. Cont..
• The performance of a
company does not always
depend only on it but also on
the external environment and
therefore companies must not
only take traditional actions,
such as lowering costs, but
also undertake innovative
activities, such as changing
organization structure or
business process, or devise a
competitive strategy.

22. • Green software refers to
software products that help
companies save energy or
comply with Environmental
Protection Agency (EPA)
requirements.
Ethical issues create pressures or constraints on business
operations.
Ethics relates to standards of right and wrong, and
information ethics relates to standards of right and
wrong in information management practices.

23. 4.Strategy for Competitive
Advantage and IT Support
• Strategy is the component that defines how to attain
our mission, goals, and objectives. It specifies the
necessary plans, budgets, and resources. Strategy
addresses fundamental issues such as the company’s
position in its industry, its available resources and
options, and future directions.
• Porter’s competitive forces model has been used to
develop strategies for companies to increase their
competitive edge. The model recognizes five major
forces that could endanger a company’s position in a
given industry.

24. Porter’s five forces are:
1-Threat of entry of new competitors
2- Bargaining power of suppliers
3- Bargaining power of customers or buyers
4- Threat of substitute products or services
5- Rivalry among existing firms in the industry

26. • According to Porter’s value chain model, the activities
conducted in any manufacturing organization can be
divided in primary and support activities. The former are
inbound logistics, operations, outbound logistics,
marketing and sales, services.
• The latter are the firm’s infrastructure, human resource
management, technology development, procurement.
• A firm’s value chain is part of a large stream of activities,
which Porter calls a value system.
• A value system includes the suppliers that provide the
inputs necessary to the firm and their value chains. A value
network is a complex set of social and technical resources.

28. • Business processes are a collection of activities
performed to accomplish a clearly defined goal, with
starting and ending points.
• A real-time system is an information system that
provides fast enough access to information or data so
that an appropriate decision can be made, usually
before data or situation changes.
• Organizational responses are usually taken in reaction to
change in the business environment or to competitors’
actions. Sometimes it is better to act proactively and
grasp the first-mover advantage.
• Examples of successful first-movers are eBay, Blogger,
Apple Computer.

29. 5. Social computing and social
Networks

30. 5. Social Computing and
Networking and Virtual Worlds
• Social computing is a general term for computing that is
concerned with the intersection of social behavior and ISs.
Social computing has to do with supporting any social behavior
in or through ISs.
• Blogs, mashups, instant messaging, social network services,
wikis, social bookmarking, and other social software and
marketplaces are types of social computing.
• Social computing concentrates on improving collaboration and
interaction among people.

31. Cont.....
• Social network is a Web site where people create their
own space, or home page, on which they write blogs
and wikis, and post pictures, videos, or music, share
ideas, and link to other Web locations they find
interesting. Social Network Services (SNSs), such as
MySpace, allow people to build their home pages for
free, and provide basic communication and other
support tools to conduct different activities in the social
network.
• These activities are referred as social networking.
Enterprise social networks are networks whose
primary objective is to facilitate business.

32. Cont...
• A virtual world is a computer based simulated environment
intended for its users to inhibit, and virtual spaces interact via
avatars. These avatars are usually depicted as textual, two-
dimensional, or three-dimensional graphical representations,
although other forms are possible.
• Using virtual worlds gives companies the opportunity to gauge
customer reaction and receive feedback about new products or
services.
• Social computing is an integration of Web 2.0 technologies. The
strategic implementation of Web 2.0 technologies into
enterprise’ intranet, extranet, and business processes results in
what we call Enterprise 2.0.
• Enterprise 2.0 includes activities in enterprise social networking
and virtual worlds, and is growing exponentially.

33. End of the Chapter