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Laudon & Laudon MIS, 7th Edition. Pg. 1.1
1.1 © 2002 by Prentice Hall
c h a p t e r
11MANAGING THEMANAGING THE
DIGITAL FIRMDIGITAL FIRM
1.2 © 2002 by Prentice Hall
•• ANALYZE ROLE OF INFORMATION ANALYZE ROLE OF INFORMATION SYSTEMS IN BUSINESS ENVIRONMENTSYSTEMS IN BUSINESS ENVIRONMENT
•• DEFINE INFORMATION SYSTEM, DEFINE INFORMATION SYSTEM, COMPUTER LITERACY, INFORMATION COMPUTER LITERACY, INFORMATION SYSTEMS LITERACYSYSTEMS LITERACY
•• EXPLAIN HOW INFORMATION SYSTEMS EXPLAIN HOW INFORMATION SYSTEMS TRANSFORM ORGANIZATION & TRANSFORM ORGANIZATION & MANAGEMENTMANAGEMENT
**
LEARNING OBJECTIVESLEARNING OBJECTIVES
© 2002 by Prentice Hall
1.3 © 2002 by Prentice Hall
LEARNING OBJECTIVESLEARNING OBJECTIVES
•• ASSESS DIGITAL FIRM, ASSESS DIGITAL FIRM, ELECTRONIC COMMERCE, ELECTRONIC COMMERCE, ELECTRONIC BUSINESS, INTERNET ELECTRONIC BUSINESS, INTERNET TECHNOLOGYTECHNOLOGY
•• IDENTIFY MANAGEMENT IDENTIFY MANAGEMENT CHALLENGES TO CHALLENGES TO
BUILDING, USING BUILDING, USING INFORMATION SYSTEMSINFORMATION SYSTEMS
** © 2002 by Prentice Hall
Laudon & Laudon MIS, 7th Edition. Pg. 1.2
1.4 © 2002 by Prentice Hall
MANAGEMENT CHALLENGESMANAGEMENT CHALLENGES
•• WHY INFORMATION SYSTEMS?WHY INFORMATION SYSTEMS?•• CONTEMPORARY APPROACHES TO CONTEMPORARY APPROACHES TO
INFORMATION SYSTEMSINFORMATION SYSTEMS•• ROLE OF INFORMATION SYSTEMSROLE OF INFORMATION SYSTEMS•• USING INFORMATION SYSTEMSUSING INFORMATION SYSTEMS
**
© 2002 by Prentice Hall
1.5 © 2002 by Prentice Hall
MANAGEMENT CHALLENGESMANAGEMENT CHALLENGES
1. DESIGN COMPETITIVE & EFFICIENT 1. DESIGN COMPETITIVE & EFFICIENT SYSTEMSSYSTEMS
2. UNDERSTAND SYSTEM 2. UNDERSTAND SYSTEM REQUIREMENTS OF GLOBAL REQUIREMENTS OF GLOBAL BUSINESS ENVIRONMENTBUSINESS ENVIRONMENT
3. CREATE INFORMATION 3. CREATE INFORMATION ARCHITECTURE THAT SUPPORTS ARCHITECTURE THAT SUPPORTS ORGANIZATION’S GOALSORGANIZATION’S GOALS
**© 2002 by Prentice Hall
1.6 © 2002 by Prentice Hall
MANAGEMENT CHALLENGESMANAGEMENT CHALLENGES
4. DETERMINE BUSINESS VALUE OF 4. DETERMINE BUSINESS VALUE OF INFORMATION SYSTEMSINFORMATION SYSTEMS
5. DESIGN SYSTEMS PEOPLE CAN 5. DESIGN SYSTEMS PEOPLE CAN CONTROL, UNDERSTAND & USE IN CONTROL, UNDERSTAND & USE IN A SOCIALLY, ETHICALLY A SOCIALLY, ETHICALLY RESPONSIBLE MANNERRESPONSIBLE MANNER
**
© 2002 by Prentice Hall© 2002 by Prentice Hall
Laudon & Laudon MIS, 7th Edition. Pg. 1.3
1.7 © 2002 by Prentice Hall
THE CHANGING BUSINESS THE CHANGING BUSINESS ENVIRONMENTENVIRONMENT
••GLOBALIZATIONGLOBALIZATION•• INDUSTRIAL ECONOMIESINDUSTRIAL ECONOMIES••TRANSFORMATION OF TRANSFORMATION OF
THE ENTERPRISETHE ENTERPRISE**
1.8 © 2002 by Prentice Hall
GLOBALIZATIONGLOBALIZATION
•• MANAGEMENT & CONTROLMANAGEMENT & CONTROL•• COMPETITION IN WORLD MARKETSCOMPETITION IN WORLD MARKETS•• GLOBAL WORK GROUPSGLOBAL WORK GROUPS•• GLOBAL DELIVERYGLOBAL DELIVERY
SYSTEMSSYSTEMS**
1.9 © 2002 by Prentice Hall
INDUSTRIAL ECONOMIESINDUSTRIAL ECONOMIES•• KNOWLEDGEKNOWLEDGE--BASED ECONOMIESBASED ECONOMIES•• PRODUCTIVITYPRODUCTIVITY•• NEW PRODUCTS & SERVICESNEW PRODUCTS & SERVICES•• KNOWLEDGE AS AN ASSETKNOWLEDGE AS AN ASSET•• TIMETIME--BASED COMPETITIONBASED COMPETITION•• SHORTER PRODUCT LIFESHORTER PRODUCT LIFE•• TURBULENT ENVIRONMENTTURBULENT ENVIRONMENT•• LIMITED EMPLOYEE LIMITED EMPLOYEE
KNOWLEDGE BASEKNOWLEDGE BASE**
Laudon & Laudon MIS, 7th Edition. Pg. 1.4
1.10 © 2002 by Prentice Hall
TRANSFORMATION OF TRANSFORMATION OF ENTERPRISEENTERPRISE•• FLATTENINGFLATTENING•• DECENTRALIZATIONDECENTRALIZATION•• FLEXIBILITYFLEXIBILITY•• LOCATION INDEPENDENCELOCATION INDEPENDENCE•• LOW TRANSACTION COSTSLOW TRANSACTION COSTS•• EMPOWERMENTEMPOWERMENT•• COLLABORATIVE WORKCOLLABORATIVE WORK
**
1.11 © 2002 by Prentice Hall
EMERGENCE OF THE EMERGENCE OF THE DIGITAL FIRMDIGITAL FIRM
•• DIGITALLYDIGITALLY--ENABLED RELATIONSHIPS ENABLED RELATIONSHIPS WITH CUSTOMERS, SUPPLIERS, WITH CUSTOMERS, SUPPLIERS, EMPLOYEESEMPLOYEES
•• CORE BUSINESS PROCESSES VIA CORE BUSINESS PROCESSES VIA DIGITAL NETWORKSDIGITAL NETWORKS
•• DIGITAL MANAGEMENT OFDIGITAL MANAGEMENT OFKEY ASSETSKEY ASSETS
•• RAPID SENSING & RAPID SENSING & RESPONDING TO CHANGERESPONDING TO CHANGE
**
1.12 © 2002 by Prentice Hall
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
LABOR FORCE COMPOSITION 1900LABOR FORCE COMPOSITION 1900--19971997
Laudon & Laudon MIS, 7th Edition. Pg. 1.5
1.13 © 2002 by Prentice Hall
SYSTEMSYSTEM
INPUT OUTPUTPROCESS
FEEDBACK
1.14 © 2002 by Prentice Hall
FUNCTIONS OF AN INFORMATION SYSTEMFUNCTIONS OF AN INFORMATION SYSTEM
INPUT OUTPUTPROCESS
FEEDBACK
INFORMATION SYSTEMINFORMATION SYSTEM
ENVIRONMENTENVIRONMENT
Customers SupplCustomers Suppliersiers
Regulatory Stockholders Regulatory Stockholders CompetitorsCompetitorsAgenciesAgencies
ORGANIZATIONORGANIZATION
1.15 © 2002 by Prentice Hall
DATA & INFORMATIONDATA & INFORMATION
•• DATA:DATA: STREAMS OF RAW FACTS STREAMS OF RAW FACTS REPRESENTING EVENTS SUCH AS REPRESENTING EVENTS SUCH AS BUSINESS TRANSACTIONSBUSINESS TRANSACTIONS
•• INFORMATION:INFORMATION: CLUSTERS OF CLUSTERS OF FACTS MEANINGFUL & USEFULFACTS MEANINGFUL & USEFULTO HUMAN BEINGS IN TO HUMAN BEINGS IN
PROCESSES SUCH AS PROCESSES SUCH AS MAKING DECISIONSMAKING DECISIONS
**
Laudon & Laudon MIS, 7th Edition. Pg. 1.6
1.16 © 2002 by Prentice Hall
COMPUTERCOMPUTER--BASED BASED INFORMATION SYSTEMS INFORMATION SYSTEMS (CBIS)(CBIS)
•• FORMAL SYSTEMSFORMAL SYSTEMS•• FIXED DEFINITIONS OF DATA, FIXED DEFINITIONS OF DATA,
PROCEDURESPROCEDURES•• COLLECTING, STORING, COLLECTING, STORING,
PROCESSING, DISSEMINATING, PROCESSING, DISSEMINATING, USING DATAUSING DATA
**
1.17 © 2002 by Prentice Hall
INFORMATION SYSTEMSINFORMATION SYSTEMS
ORGANIZATIONSORGANIZATIONS TECHNOLOGYTECHNOLOGY
MANAGEMENTMANAGEMENT
INFORMATIONINFORMATION
SYSTEMSSYSTEMS
1.18 © 2002 by Prentice Hall
ORGANIZATIONSORGANIZATIONS
•• PEOPLE:PEOPLE: Managers, knowledge Managers, knowledge workers, data workers, production or workers, data workers, production or service workersservice workers
•• STRUCTURE:STRUCTURE: Organization Organization chart, groups of specialists, chart, groups of specialists,
products, geographyproducts, geography**
Laudon & Laudon MIS, 7th Edition. Pg. 1.7
1.19 © 2002 by Prentice Hall
ORGANIZATIONSORGANIZATIONS
•• OPERATING PROCEDURES:OPERATING PROCEDURES:Standard Operating Procedures Standard Operating Procedures (SOP),(SOP), rules for actionrules for action
•• POLITICS:POLITICS: Power to persuade, Power to persuade, get things doneget things done
•• CULTURE:CULTURE: Customs of Customs of behaviorbehavior
**
1.20 © 2002 by Prentice Hall
MAJOR MAJOR BUSINESS FUNCTIONSBUSINESS FUNCTIONS
•• SALES & MARKETINGSALES & MARKETING•• MANUFACTURINGMANUFACTURING•• FINANCEFINANCE•• ACCOUNTINGACCOUNTING•• HUMAN RESOURCESHUMAN RESOURCES
**
1.21 © 2002 by Prentice Hall
COMPUTERCOMPUTER TECHNOLOGYTECHNOLOGY
•• HARDWAREHARDWARE•• SOFTWARESOFTWARE•• STORAGESTORAGE•• COMMUNICATIONSCOMMUNICATIONS•• NETWORKSNETWORKS
**
Laudon & Laudon MIS, 7th Edition. Pg. 1.8
1.22 © 2002 by Prentice Hall
SOCIOLOGYSOCIOLOGY
POLITICAL POLITICAL SCIENCESCIENCE
PSYCHOLOGYPSYCHOLOGY
COMPUTER COMPUTER
SCIENCESCIENCE OPERATIONS OPERATIONS
RESEARCHRESEARCH
MANAGEMENTMANAGEMENT
SCIENCESCIENCE
TECHNICAL APPROACHESTECHNICAL APPROACHES
APPROACHES TO INFO APPROACHES TO INFO SYSTEMSSYSTEMS
MISMIS
BEHAVIORAL APPROACHESBEHAVIORAL APPROACHES
1.23 © 2002 by Prentice Hall
SOCIOTECHNICAL SOCIOTECHNICAL PERSPECTIVEPERSPECTIVE
OPTIMIZE SYSTEM PERFORMANCE:OPTIMIZE SYSTEM PERFORMANCE:TECHNOLOGY & ORGANIZATION TECHNOLOGY & ORGANIZATION
MUTUALLY ADJUST TO MUTUALLY ADJUST TO ONE ANOTHERONE ANOTHER
UNTIL FIT IS SATISFACTORYUNTIL FIT IS SATISFACTORY**
SOURCE: Liker, et al, 1987
1.24 © 2002 by Prentice Hall
SYSTEM INTERDEPENDENCESYSTEM INTERDEPENDENCE
BUSINESSBUSINESS
StrategyStrategy
RulesRules
ProceduresProcedures
ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM
HARDWAREHARDWARE
SOFTWARESOFTWARE DATABASEDATABASE
TELETELE--COMMUNICATIONSCOMMUNICATIONS
INTERDEPENDENCEINTERDEPENDENCE
Laudon & Laudon MIS, 7th Edition. Pg. 1.9
1.25 © 2002 by Prentice Hall
•• 1950s:1950s: TECHNICAL CHANGESTECHNICAL CHANGES•• 60s60s--70s:70s: MANAGERIAL MANAGERIAL
CONTROLCONTROL•• 80s80s--90s:90s: INSTITUTIONAL INSTITUTIONAL
CORE ACTIVITIESCORE ACTIVITIES
GROWING IMPORTANCEGROWING IMPORTANCE**
SCOPE OF INFO SYSTEMSSCOPE OF INFO SYSTEMS
1.26 © 2002 by Prentice Hall
WHAT YOU CAN DO ON THE WHAT YOU CAN DO ON THE INTERNETINTERNET
•• COMMUNICATE & COLLABORATECOMMUNICATE & COLLABORATE•• ACCESS INFORMATIONACCESS INFORMATION•• DISCUSSDISCUSS•• OBTAIN INFORMATIONOBTAIN INFORMATION•• ENTERTAINENTERTAIN•• TRANSACT BUSINESS TRANSACT BUSINESS
**
1.27 © 2002 by Prentice Hall
NEW OPTIONS FOR NEW OPTIONS FOR ORGANIZATIONAL DESIGNORGANIZATIONAL DESIGN
•• FLATTENING ORGANIZATIONSFLATTENING ORGANIZATIONS•• SEPARATING WORK FROM LOCATIONSEPARATING WORK FROM LOCATION•• REORGANIZING WORKREORGANIZING WORK--FLOWSFLOWS•• INCREASING FLEXIBILITYINCREASING FLEXIBILITY•• REDEFINING REDEFINING ORGANIZATIONAL ORGANIZATIONAL
BOUNDARIESBOUNDARIES
**
Laudon & Laudon MIS, 7th Edition. Pg. 1.10
1.28 © 2002 by Prentice Hall
THE DIGITAL FIRMTHE DIGITAL FIRM
•• ELECTRONIC COMMERCEELECTRONIC COMMERCE•• ELECTRONIC BUSINESSELECTRONIC BUSINESS•• ELECTRONIC MARKET:ELECTRONIC MARKET: Information Information
system links buyers & sellers to system links buyers & sellers to exchange information, exchange information,
products, services, paymentsproducts, services, payments**
1.29 © 2002 by Prentice Hall
ELECTRONIC COMMERCEELECTRONIC COMMERCE•• INTERNET LINKS BUYERS, INTERNET LINKS BUYERS,
SELLERSSELLERS•• LOWERS TRANSACTION COSTSLOWERS TRANSACTION COSTS•• GOODS & SERVICES GOODS & SERVICES
ADVERTISED, BOUGHT, ADVERTISED, BOUGHT, EXCHANGED WORLDWIDEEXCHANGED WORLDWIDE
•• BUSINESSBUSINESS--TOTO--BUSINESS BUSINESS TRANSACTIONS INCREASINGTRANSACTIONS INCREASING
**
1.30 © 2002 by Prentice Hall
ELECTRONIC BUSINESSELECTRONIC BUSINESS
•• INTRANET:INTRANET: Business builds private, Business builds private, secure networksecure network
•• EE--MAIL, WEB DOCUMENTS, GROUP MAIL, WEB DOCUMENTS, GROUP SOFTWARE:SOFTWARE: Extends effective Extends effective
communication & controlcommunication & control•• EXTRANET:EXTRANET: Extension of Extension of
Intranet to authorized external Intranet to authorized external usersusers
**
Laudon & Laudon MIS, 7th Edition. Pg. 1.11
1.31 © 2002 by Prentice Hall
c h a p t e r
11MANAGING THEMANAGING THE
DIGITAL FIRMDIGITAL FIRM
