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Chapter 1Business Driven Technology1CLASSROOM OPENERGREAT BUSINESS DECISIONS Apples Decision to Develop the First Saleable Personal Computer (PC)Like all great computer companies, Apple began its life in a garage. In 1977, Steve Jobs and Steve Wozniak built the Apple 1, regarded by many as the first real personal computer. This founded the Apple Company and the invention of the Apple 2 and the Apple Macintosh. Apples key goal was to make computers accessible to ordinary people. Jobs and Wozniak captured an opportunity and changed the world through a combination of good fortune and technical and marketing brilliance.Instead of writing commands in computer code, Apple owners invented a mouse to click on easily recognizable icons for example, a trash can and file folders. Other companies were quick to copy Apples competitive advantage, including Microsoft.The two founders eventually parted, with Wozniak leaving the company to become a teacher and Jobs continuing with the launch of the Apple Macintosh. Unfortunately, Macintosh captured only 20 percent of the desktop market, while Microsoft captured 80 percent of the desktop market with its MS-DOS operating system. One newspaper described Jobs as a corporate Huckleberry Finn and said his early business exploits had already made him part of American folk history. John Sculley, former Pepsi chairman, removed Jobs from Apple in 1985. Sculley was removed from Apple in 1993. Eventually, after a 13-year exile, Jobs returned to Apple in 1998. The man who founded the company had come full circle and was now its only hope for survival. Jobs return brought the creation of the iMac and Apple rediscovered its inventive originality. The iMac sold 278,000 units in the first six weeks and was described by Fortune as one of the hottest computer launches ever. The iMac and Jobs return contributed to doubling Apples share prices in less than a year.Learning Outcomes1.1Compare management information systems (MIS) and information technology (IT)

1.2Describe the relationships among people, information technology, and information

21.1 Compare management information systems (MIS) and information technology (IT)MIS is not IT. MIS is a business function. IT is a computer-based tool. Most organizations have an IT Department that is responsible for performing the MIS function. This is similar to an organization having an Accounting Department that is responsible for performing the accounts payable and accounts receivable functions.1.2 Describe the relationships among people, information technology, and informationIT in and of itself is not useful unless the right people know how to use and manage IT efficiently and effectivelyPeople, information, and information technology (in that order of priority) are inextricably linkedIf one fails, they all failLearning Outcomes1.3Identify four different departments in a typical business and explain how technology helps them to work together

1.4Compare the four different types of organizational information cultures and decide which culture applies to your school

31.3 Identify four different departments in a typical business and explain how technology helps them to work together.Accounting, Finance, Human resources, Sales, Marketing, Operations management, Management information systems (MIS)Functional areas are anything but independent in a business. In fact, functional areas are interdependent. Sales must rely on information from operations to understand inventory, place orders, calculate transportation costs, and gain insight into product availability based on production schedules. For an organization to succeed, every department or functional area must work together sharing common information and not be a silo. Information technology can enable departments to more efficiently and effectively perform their business operations. If your students are unfamiliar with any of these areas, or business in general, point them in the direction of plug-in B1 Business Basics. This plug-in will provide students with a solid understanding of business and will help them understand the business driven content in this text.1.4 Compare the four different types of organizational information cultures and decide which culture applies to your school. Information-Functional Culture Employees use information as a means of exercising influence or power over others. For example, a manager in sales refuses to share information with marketing. This causes marketing to need the sales managers input each time a new sales strategy is developedInformation-Sharing Culture Employees across departments trust each other to use information (especially about problems and failures) to improve performanceInformation-Inquiring Culture Employees across departments search for information to better understand the future and align themselves with current trends and new directionsInformation-Discovery Culture Employees across departments are open to new insights about crisis and radical changes and seek ways to create competitive advantagesThis is an excellent opportunity to start a classroom debate by asking your student to determine which information culture applies to your school. Chances are the students will have different views of the school and its information culture. Information Technologys Role in BusinessInformation technology is everywhere in business

4Why do you think you need to study information technology?The picture above says it all technology is everywhere in businessBe sure to point-out that these are business magazines, not technology magazines, and yet they are filled with technology

CLASSROOM EXERCISEUnderstanding the Relevance of Technology In BusinessThis is a great exercise to begin the course. It clearly demonstrates why anyone involved in business must understand technology. It can be a real revelation for students who do not see the need for taking an IT course.Bring in several copies of BusinessWeek, Fortune, Fast Company, or any popular business magazine. The magazines do not have to be current. Provide a marking tool such as a small set of Post-It Notes. Ask for a few volunteers and have the students review the magazine and stick a Post-It Note on each technology-related article, advertisement, etc. When the student has completed this task, the magazine will be covered in Post-it Notes, clearly demonstrating that technology is everywhere in business, even in the popular business magazines such as BusinessWeek.Since this task can be time consuming, you can put in the Post-It Notes prior to class and simply show your students the completed magazine. You can have one student sit in the front of the class and begin the exercise, placing Post-It Notes on a copy of BusinessWeek. After they have completed several pages on their own, you can produce the same completed magazine with all of the Post-It Notes. This saves classroom time and still reinforces the point that technology is everywhere in business.Be sure to reinforce that these are business magazines, not technology magazines. Yet they are completely filled with technology which is clearly demonstrated by the Post-It Notes. How can any business student today possibly argue that they do not need to know or understand technology when faced with a magazine, such as BusinessWeek, that is filled with technology? Read a few of the articles or advertisements. Ask how many of your students are familiar with Siebel, Oracle, or PeopleSoft and can articulate what they can do for a company? The goal of this course is to help your students understand the business side of technology. Being able to understand all of the technology articles in BusinessWeek is one of the benefits your students will receive upon completion of the course.Information Technologys Impact on Business Operations

5Describe a few of the types of IT services each business function might be receiving from ITCustomer service: click-to-talk, call scripting, auto answering, call centersFinance: accounting packages, Sarbanes OxleySales and marketing: campaign management, customer relationship managementOperations: supply chain managementHuman resources: software to track employees at risk of leaving

Information Technologys Impact on Business Operations

6Which types of IT services can be used to meet these types of goals?Reduce costs/ improve productivity: supply chain management, enterprise resource planningImprove customer satisfaction/loyalty: customer relationship management, loyalty programsCreate competitive advantage: business intelligence/data warehousingGenerate growth: sales management systemsStreamline supply chain: demand planning softwareGlobal expansion: e-businessInformation Technologys Impact on Business Operations

7This is an excellent opportunity to discuss each business area and ensure your students have a solid understanding of business in general:Accounting provides quantitative information about the finances of the business including recording, measuring, and describing financial informationFinance deals with the strategic financial issues associated with increasing the value of the business, while observing applicable laws and social responsibilitiesHuman resources includes the policies, plans, and procedures for the effective management of employees (human resources)Sales is the function of selling a good or service and focuses on increasing customer sales, which increases company revenuesMarketing is the process associated with promoting the sale of goods or services. The marketing department supports the sales department by creating promotions that help sell the companys productsOperations management (also called production management ) includes the methods, tasks, and techniques organizations use to produce goods and services. Transportation (also called logistics) is part of operations management.Management information systems (MIS) is the function that plans for, develops, implements, and maintains IT hardware, software, and the portfolio of applications that people use to support the goals of an organizationIf any of your students are unfamiliar with these business areas recommend Business Plug-In B1 Business Basics, which offers a detailed introduction to business and discusses each functional area highlighted aboveInformation Technologys Impact on Business OperationsOrganizations typically operate by functional areas or functional silos

Functional areas are interdependent

8Each functional area undertakes a specific core business functionSales and Marketing forecasting, segmentation, advertising, promotionsOperations and Logistics purchasing, supplying, receiving, transportationAccounting and finance accounting, planning, budgeting, tax, costsHuman resources hiring, training, benefits, and payrollIt is important for your students to understand that functional areas are anything but independent, in fact, they are interdependentWhy are functional areas interdependent?Departments cannot operate in isolation, they require information from around the organization to operateWhy must sales and marketing work with operations? To know what is available for sale including overstocked items and understocked items

Information Technology BasicsInformation technology (IT) a field concerned with the use of technology in managing and processing information

Information technology is an important enabler of business success and innovation9IT does not equal or represent business success and innovation, it is simply an enabler of business success and innovationWill spending large amounts of money on IT guarantee automatic success?Spending large amounts of money on IT will not guarantee an organization automatic successOrganizations need to allocate resources on the right types of IT that correctly support their business operations to be successfulInformation Technology BasicsManagement information systems (MIS) a general name for the business function and academic discipline covering the application of people, technologies, and procedures to solve business problems

MIS is a business function, similar to Accounting, Finance, Operations, and Human Resources10MIS is not technologyMIS is a business functionMost organizations have an IT department that is responsible for performing the MIS functionThis is similar to an organization having an Accounting department that is responsible for performing the accounts payable and accounts receivable functionsInformation Technology BasicsWhen beginning to learn about information technology it is important to understandData, information, and business intelligenceIT resourcesIT cultures11Understanding these three critical areas will help you begin to understand ITThe goal of Chapter 1 is to get students excited about BDT and all the different business and technology concepts they are going to learnAfter reading this Chapter students should begin to understand that technology is everywhere in business and if they are pursuing a career in business they need to understand technologyData, Information, and BIData - raw facts that describe the characteristic of an event

Information - data converted into a meaningful and useful context

Business intelligence applications and technologies that are used to support decision-making efforts12When discussing Information Technology it is important to understand what information isAsk your students to look around the classroom and identify 3 pieces of data and 3 pieces of informationThis is a bit of a trick question, unless you know the system you are building or the problem you are trying to solve it is impossible to know what is data and what is informationFor example, if you were building a system to track students:Data might include height, name, and hair colorInformation might include student to professor ratio, percentage of marketing majors who are female, number of students who pass the course.If you were building a system to track inventory:Data might include chair manufacturer, chair color, and chair sizeInformation might include number of chairs required for students in each class, average number of chairs needed to be replaced each semester.

For example, if you were building a system to track students:Data might include height, name, and hair colorInformation might include student to professor ratio, percentage of marketing majors who are female, number of students who pass the course.

If you were building a system to track inventory:Data might include chair manufacturer, chair color, and chair sizeInformation might include number of chairs required for students in each class, average number of chairs needed to be replaced each semester.

Data, Information, and BIData in an Excel Spreadsheet

Point out to students that each column represents data that has no meaning without interpretationSales Rep just a nameProduct Name just a nameQuantity just a numberProfit just a number

Without analyzing the data it is just a bunch of names and numbers14Data, Information, and BIData turned into information

By analyzing the data we can start to understand the information that the data is telling usThe above figure displays all chicken orders, which customers purchased chicken, for sales representative Roberta Cross

15Data, Information, and BIInformation turned into Business Intelligence

By using analysis we can determine all kinds of business intelligence from who is our best customer to who is our best sales representative and what is our best selling productAsk your students what they could do with this information?How can BI help run a business?

16IT ResourcesPeople use

Information technology to work with

Information

17IT in and of itself is not useful unless the right people know how to use and manage it efficiently and effectivelyPeople, information, and information technology (in that order of priority) are inextricably linkedIf one fails, they all failWhat is one of the most important assets in an organization?Information is one of the most important assets in an organization, and the primary way that people get information is through information technologyWithout databases and spreadsheets how would managers gather, correlate, and analyze information? ManuallyPerforming these tasks manually, or by hand, is extremely time consumingIT CulturesOrganizational information cultures include:Information-functional culture Information-sharing culture Information-inquiring culture Information-discovery culture

18Information-Functional Culture - Employees use information as a means of exercising influence or power over others. For example, a manager in sales refuses to share information with marketing. This causes marketing to need the sales managers input each time a new sales strategy is developed.Information-Sharing Culture - Employees across departments trust each other to use information (especially about problems and failures) to improve performance.Information-Inquiring Culture - Employees across departments search for information to better understand the future and align themselves with current trends and new directions.Information-Discovery Culture - Employees across departments are open to new insights about crisis and radical changes and seek ways to create competitive advantages.

Which type of information culture will help an organization achieve the greatest success?Information-discovery cultureWhich type of information culture would hurt an organization?Information-functional cultureOrganizations that encourage their employees to share ideas and openly discuss challenges and opportunities on an enterprisewide level have a competitive advantage over organizations that operate in functional silosThis point is easily demonstrated by looking back at the Apple case and how many different people from different areas needed to be involved in the iPod creationApple even purchased an outside company, SoundStep, to help bring the iPod to life.

Information-Functional Culture Employees use information as a means of exercising influence or power over others. For example, a manager in sales refuses to share information with marketing. This causes marketing to need the sales managers input each time a new sales strategy is developed.

Information-Sharing Culture Employees across departments trust each other to use information (especially about problems and failures) to improve performance.

Information-Inquiring Culture Employees across departments search for information to better understand the future and align themselves with current trends and new directions.

Information-Discovery Culture Employees across departments are open to new insights about crisis and radical changes and seek ways to create competitive advantages.