Mgt 20600: Mgt 20600: IT Management & ApplicationsIT Management & Applications

Catalysts for IT InvestmentCatalysts for IT InvestmentHardwareHardware

ThursdayThursday

September 1, 2005September 1, 2005

RemindersReminders ReadingReading

– For todayFor today Fundamentals text, Chapter OneFundamentals text, Chapter One HBR article, “Why IT Doesn’t Matter Anymore”HBR article, “Why IT Doesn’t Matter Anymore”

– For next weekFor next week Fundamentals text, Chapter Two, Hardware sectionFundamentals text, Chapter Two, Hardware section

HomeworkHomework– Homework One due next Friday, 9/9 by 5pmHomework One due next Friday, 9/9 by 5pm

Submit to Mgt20600.01, .02, .03, or .04 dropboxSubmit to Mgt20600.01, .02, .03, or .04 dropbox– Homework Two is now availableHomework Two is now available

Due Friday, 9/16 by 5pmDue Friday, 9/16 by 5pm Next week’s class session: SoftwareNext week’s class session: Software

““Why IT Doesn’t Matter Anymore”Why IT Doesn’t Matter Anymore”

Major pointsMajor points– Core functions of IT available to allCore functions of IT available to all

Can no longer provide a competitive Can no longer provide a competitive advantageadvantage

Are now commodity factors of productionAre now commodity factors of productionNeed to turn focus to risks of disruption of IT Need to turn focus to risks of disruption of IT

infrastructureinfrastructureShould eliminate wasteful spending on ITShould eliminate wasteful spending on IT

““Why IT Doesn’t Matter Anymore”Why IT Doesn’t Matter Anymore”DiscussionDiscussion

Does the provocative title of the Does the provocative title of the article accurately match the content?article accurately match the content?

Can you think of ways to counter the Can you think of ways to counter the author’s argument?author’s argument?

Can you think of examples that run Can you think of examples that run counter to the author’s argument?counter to the author’s argument?

““Why IT Doesn’t Matter Anymore”Why IT Doesn’t Matter Anymore”

CounterargumentsCounterarguments– Some technologies may have become commodities but what Some technologies may have become commodities but what

really matters is how they are usedreally matters is how they are used Example: Organizations use commodity wireless devices Example: Organizations use commodity wireless devices

differently and those differences may provide competitive differently and those differences may provide competitive advantageadvantage

– It’s not the technology itself that’s important, it’s thinking up It’s not the technology itself that’s important, it’s thinking up and implementing new tech-enabled business processes that and implementing new tech-enabled business processes that improve organizational performanceimprove organizational performance

– Organizations differ with respect to the efficiency and Organizations differ with respect to the efficiency and effectiveness with which they deploy and use technology, effectiveness with which they deploy and use technology, ultimately affecting organizational performanceultimately affecting organizational performance

– Technology continues to evolve – yesterday’s invention is Technology continues to evolve – yesterday’s invention is today’s commodity but the inventions keep on comingtoday’s commodity but the inventions keep on coming

Incorporating the inventions will continue to confer competitive Incorporating the inventions will continue to confer competitive advantageadvantage

Example: Radio frequency id tags (RFID)Example: Radio frequency id tags (RFID)

Reasons for Adoption of Business Reasons for Adoption of Business Information SystemsInformation Systems

Gives firm a competitive advantageGives firm a competitive advantage– Significant, long-term benefit to a company Significant, long-term benefit to a company

over its competitionover its competition– Ability to establish and maintain a competitive Ability to establish and maintain a competitive

advantage is vital to a company’s successadvantage is vital to a company’s success Improves firm performanceImproves firm performance

– Cuts costsCuts costs– Higher productivityHigher productivity– Earnings growthEarnings growth– Market shareMarket share– Customer awareness and satisfactionCustomer awareness and satisfaction

Strategic Use of Business Strategic Use of Business Information SystemsInformation Systems

Change the structure of the industryChange the structure of the industry Create new products or servicesCreate new products or services Improve existing products or servicesImprove existing products or services

Strategic Use of Business Strategic Use of Business Information SystemsInformation Systems

Recording industryRecording industry– Catalyst for change?Catalyst for change?– Change the structure of the industryChange the structure of the industry– Create new products or servicesCreate new products or services– Improve existing products or servicesImprove existing products or services

Network televisionNetwork television– Catalyst for change?Catalyst for change?– Change the structure of the industryChange the structure of the industry– Create new products or servicesCreate new products or services– Improve existing products or servicesImprove existing products or services

Performance Improvement:Performance Improvement:Insurance Carrier IT SpendingInsurance Carrier IT Spending

Conservative spending on ITConservative spending on IT– Low proportion of revenues spent on IT compared to Low proportion of revenues spent on IT compared to

financial services firmsfinancial services firms– 1% IT budget increases in 20051% IT budget increases in 2005

Plan to increase spending onPlan to increase spending on– Internet initiativesInternet initiatives– Storage serversStorage servers– PCsPCs– Application developmentApplication development

Strategic goals for IT expendituresStrategic goals for IT expenditures– Reduce operating costsReduce operating costs– Acquire customersAcquire customers– Improve quality and employee efficiencyImprove quality and employee efficiency

Performance Improvement: Home Performance Improvement: Home DepotDepot

Has been relying on in-house Has been relying on in-house developed systems that have developed systems that have become too costly to maintainbecome too costly to maintain

Now want new technology to supportNow want new technology to support– Company’s expansionCompany’s expansion– Improved store operationsImproved store operations– Improved customer serviceImproved customer service

Performance Improvement: Home Performance Improvement: Home DepotDepot

Undertaking a $1 billion overhaul of its IT Undertaking a $1 billion overhaul of its IT infrastructureinfrastructure– Replace old Point-of-Sale systemsReplace old Point-of-Sale systems– Install self-checkout countersInstall self-checkout counters– Local area network upgradesLocal area network upgrades– Data warehousing for sales and labor scheduling dataData warehousing for sales and labor scheduling data– Price optimization softwarePrice optimization software– SAP financial softwareSAP financial software– PeopleSoft ERP (enterprise resource planning) softwarePeopleSoft ERP (enterprise resource planning) software– New software applications to streamline price check and New software applications to streamline price check and

receipt lookup servicesreceipt lookup services

Information System Technology: Information System Technology: HardwareHardware

Users must work closely with IS Users must work closely with IS professionals to define business professionals to define business needs, evaluate options, and select needs, evaluate options, and select the hardware and software that the hardware and software that provide a cost-effective solution to provide a cost-effective solution to those needs.those needs.

Information Systems:Information Systems:The System of Hardware ComponentsThe System of Hardware Components

Input Devices Memory andProcessor

Storage andOutput Devices

Hardware Components DiagramHardware Components Diagram

Figure 2.1: Computer System ComponentsFigure 2.1: Computer System Components

Input DevicesInput Devices A huge variety to choose fromA huge variety to choose from Must match input device to taskMust match input device to task

– KeyboardKeyboard– MouseMouse– Microphones/voice recognitionMicrophones/voice recognition– Touch screensTouch screens– Bar-code scannersBar-code scanners– Point-of-sale devicesPoint-of-sale devices– Radio frequency ID chipsRadio frequency ID chips

ExamplesExamples– Self check-out counter input devices?Self check-out counter input devices?– Phone-based customer information system input device?Phone-based customer information system input device?

Processing the InputsProcessing the Inputs

Processing deviceProcessing device works hand in works hand in hand withhand with

MemoryMemory (book uses primary storage (book uses primary storage as a synonym for this)as a synonym for this)– To processTo process

Data transferred to the system by the input Data transferred to the system by the input devicesdevices

Instructions from the operating system and Instructions from the operating system and software applicationssoftware applications

What a Processor Looks LikeWhat a Processor Looks Like

What Memory Looks LikeWhat Memory Looks Like

Processing the Inputs: Processing the Inputs: The ProcessorThe Processor

Processors can vary according toProcessors can vary according to– Size – how much data they can process at a timeSize – how much data they can process at a time– Speed – how fast they execute instructionsSpeed – how fast they execute instructions– Coordinated or multi-processing – how many processors Coordinated or multi-processing – how many processors

work togetherwork together– The materials from which they are madeThe materials from which they are made– How fast they can communicate with memory and with How fast they can communicate with memory and with

each othereach other– Of course this affects the cost!Of course this affects the cost!

The trick is to buy the right processor for the task The trick is to buy the right processor for the task at hand!at hand!

ExamplesExamples– WalMart’s transaction processing systemWalMart’s transaction processing system– Individual executive’s spreadsheet analysisIndividual executive’s spreadsheet analysis

Processing the Inputs: MemoryProcessing the Inputs: Memory Memory varies according toMemory varies according to

– Size – how much capacity it hasSize – how much capacity it has– Volatility – whether you lose what’s in it when the Volatility – whether you lose what’s in it when the

electricity goes offelectricity goes off– Function – ROM (read-only memory) holds permanent Function – ROM (read-only memory) holds permanent

instructions whereas RAM (random access memory) instructions whereas RAM (random access memory) holds temporary data and instructionsholds temporary data and instructions

– Speed - How fast it can communicate with the processor Speed - How fast it can communicate with the processor (bus speed)(bus speed)

– How close it is located to the processor (cache memory)How close it is located to the processor (cache memory) Again, you must match your memory purchase to Again, you must match your memory purchase to

the tasks you intend to performthe tasks you intend to perform

Storing the OutputStoring the Output

Secondary or long-term storage is used to Secondary or long-term storage is used to permanently store data or outputpermanently store data or output

Greater capacity and greater economy Greater capacity and greater economy than memorythan memory

Many different types of secondary storage Many different types of secondary storage devices that vary bydevices that vary by– CapacityCapacity– CostCost– Speed of data retrievalSpeed of data retrieval– Access methodAccess method

Storing the OutputStoring the Output Secondary storage devicesSecondary storage devices

– Hard diskHard disk– Magnetic tapesMagnetic tapes– Magnetic disksMagnetic disks– Redundant array of independent/inexpensive disks (RAID)Redundant array of independent/inexpensive disks (RAID)– Compact disc read-only memory (CD-ROM)Compact disc read-only memory (CD-ROM)– CD-recordable (CD-R) discsCD-recordable (CD-R) discs– CD-rewritable (CD-RW) discsCD-rewritable (CD-RW) discs– Digital versatile disc (DVD)Digital versatile disc (DVD)– Memory cardsMemory cards– Expandable storageExpandable storage– Storage Area Network (SAN)Storage Area Network (SAN)

Guess what! You have to match your storage device to the Guess what! You have to match your storage device to the tasks you are undertaking!tasks you are undertaking!

What a Hard Disk Looks LikeWhat a Hard Disk Looks Like

Comparison of Secondary Device Comparison of Secondary Device Capacities and CostCapacities and Cost

Displaying the OutputDisplaying the Output

There are also countless ways to display There are also countless ways to display the output of your information processingthe output of your information processing

Output device typesOutput device types– Computer screenComputer screen– PrinterPrinter– Mobile deviceMobile device– TelephoneTelephone– Head phonesHead phones

Need I say it again! Match the output Need I say it again! Match the output device to your needs and budget!device to your needs and budget!

Information Systems:Information Systems:The System of Hardware ComponentsThe System of Hardware Components

Input Devices Memory andProcessor

Storage andOutput Devices

Computer System TypesComputer System Types Very often all the input, output, processing, memory, and Very often all the input, output, processing, memory, and

storage devices will come bundled together in a computer storage devices will come bundled together in a computer system you buy as a wholesystem you buy as a whole

The major computer systems types areThe major computer systems types are– Handheld computersHandheld computers– Portable computersPortable computers– Thin clientThin client– Desktop computersDesktop computers– WorkstationsWorkstations– ServersServers– Mainframe computersMainframe computers– SupercomputersSupercomputers

Each type has a very different role in life!Each type has a very different role in life! Your job, of course, is to choose which best fits your Your job, of course, is to choose which best fits your

organization’s needs and budgetorganization’s needs and budget

What a Mainframe Looks LikeWhat a Mainframe Looks Like

What a SuperComputer Looks LikeWhat a SuperComputer Looks Like

Comparison of Major Computer Comparison of Major Computer System TypesSystem Types

RemindersReminders ReadingReading

– For todayFor today Fundamentals text, Chapter OneFundamentals text, Chapter One HBR article, “Why IT Doesn’t Matter Anymore”HBR article, “Why IT Doesn’t Matter Anymore”

– For next weekFor next week Fundamentals text, Chapter Two, Hardware sectionFundamentals text, Chapter Two, Hardware section

HomeworkHomework– Homework One due next Friday, 9/9 by 5pmHomework One due next Friday, 9/9 by 5pm

Submit to Mgt20600.01, .02, .03, or .04 dropboxSubmit to Mgt20600.01, .02, .03, or .04 dropbox– Homework Two is now availableHomework Two is now available

Due Friday, 9/16 by 5pmDue Friday, 9/16 by 5pm Next week’s class session: SoftwareNext week’s class session: Software