1.1

c h a p t e r

11MANAGING THEMANAGING THE

DIGITAL FIRMDIGITAL FIRM

1.2

• ANALYZE ROLE OF INFORMATION ANALYZE ROLE OF INFORMATION SYSTEMS IN ORGANIZATIONSSYSTEMS IN ORGANIZATIONS

• 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

1.3

LEARNING OBJECTIVESLEARNING OBJECTIVES

• ASSESS DIGITAL FIRM, ELECTRONIC ASSESS DIGITAL FIRM, ELECTRONIC COMMERCE, ELECTRONIC BUSINESS, COMMERCE, ELECTRONIC BUSINESS, INTERNET TECHNOLOGYINTERNET TECHNOLOGY

• IDENTIFY MANAGEMENT IDENTIFY MANAGEMENT CHALLENGES TO CHALLENGES TO BUILDING, BUILDING, USING USING INFORMATION SYSTEMSINFORMATION SYSTEMS

**

1.4

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

**

1.5

MANAGEMENT CHALLENGESMANAGEMENT CHALLENGES

1. DESIGN COMPETITIVE & EFFICIENT 1. DESIGN COMPETITIVE & EFFICIENT SYSTEMSSYSTEMS

2. UNDERSTAND SYSTEM REQUIREMENTS 2. UNDERSTAND SYSTEM REQUIREMENTS IN A GLOBAL ENVIRONMENTIN A GLOBAL ENVIRONMENT

3. CREATE INFORMATION ARCHITECTURE 3. CREATE INFORMATION ARCHITECTURE THAT SUPPORTS ORGANIZATION’S THAT SUPPORTS ORGANIZATION’S GOALSGOALS

**

1.6

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 CONTROL, UNDERSTAND & USE

**

1.7

THE CHANGING ENVIRONMENTTHE CHANGING ENVIRONMENT

• GLOBALIZATIONGLOBALIZATION

• INDUSTRIAL ECONOMIESINDUSTRIAL ECONOMIES

• TRANSFORMATION OF TRANSFORMATION OF THE ENTERPRISETHE ENTERPRISE

**

1.8

GLOBALIZATIONGLOBALIZATION

• MANAGEMENT & CONTROLMANAGEMENT & CONTROL

• COMPETITION IN WORLD MARKETSCOMPETITION IN WORLD MARKETS

• GLOBAL WORK GROUPSGLOBAL WORK GROUPS

• GLOBAL DELIVERYGLOBAL DELIVERY SYSTEMSSYSTEMS

**

1.9

INDUSTRIAL ECONOMIESINDUSTRIAL ECONOMIES

• KNOWLEDGE-BASED ECONOMIESKNOWLEDGE-BASED ECONOMIES• PRODUCTIVITYPRODUCTIVITY• NEW PRODUCTS & SERVICESNEW PRODUCTS & SERVICES• KNOWLEDGE AS AN ASSETKNOWLEDGE AS AN ASSET• TIME-BASED COMPETITIONTIME-BASED COMPETITION• SHORTER PRODUCT LIFESHORTER PRODUCT LIFE• TURBULENT ENVIRONMENTTURBULENT ENVIRONMENT• LIMITED EMPLOYEE LIMITED EMPLOYEE KNOWLEDGE BASEKNOWLEDGE BASE

**

1.10

TRANSFORMATION OF TRANSFORMATION OF ENTERPRISEENTERPRISE

• FLATTENINGFLATTENING• DECENTRALIZATIONDECENTRALIZATION• FLEXIBILITYFLEXIBILITY• LOCATION INDEPENDENCELOCATION INDEPENDENCE• LOW TRANSACTION COSTSLOW TRANSACTION COSTS• EMPOWERMENTEMPOWERMENT• COLLABORATIVE WORKCOLLABORATIVE WORK

**

1.11

EMERGENCE OF THE EMERGENCE OF THE DIGITAL FIRMDIGITAL FIRM

• DIGITALLY-ENABLED RELATIONSHIPS WITH DIGITALLY-ENABLED RELATIONSHIPS WITH CUSTOMERS, SUPPLIERS, EMPLOYEESCUSTOMERS, SUPPLIERS, EMPLOYEES

• CORE BUSINESS PROCESSES VIA DIGITAL CORE BUSINESS PROCESSES VIA DIGITAL NETWORKSNETWORKS

• DIGITAL MANAGEMENT OFDIGITAL MANAGEMENT OF KEY ASSETSKEY ASSETS

• RAPID SENSING & RAPID SENSING & RESPONDING TO CHANGERESPONDING TO CHANGE

**

1.12

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 1900-1997LABOR FORCE COMPOSITION 1900-1997

1.13

SYSTEMSYSTEM

INPUT OUTPUTPROCESS

FEEDBACK

1.14

FUNCTIONS OF AN INFORMATION FUNCTIONS OF AN INFORMATION SYSTEMSYSTEM

INPUT OUTPUTPROCESS

FEEDBACK

INFORMATION SYSTEMINFORMATION SYSTEM

ENVIRONMENTENVIRONMENT

Customers SuppliersCustomers Suppliers

Regulatory Stockholders CompetitorsRegulatory Stockholders CompetitorsAgenciesAgencies

ORGANIZATIONORGANIZATION

1.15

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 FACTS CLUSTERS OF FACTS MEANINGFUL & USEFULMEANINGFUL & USEFUL TO TO HUMAN BEINGS IN HUMAN BEINGS IN PROCESSES PROCESSES SUCH AS SUCH AS MAKING DECISIONSMAKING DECISIONS

**

1.16

COMPUTER-BASED INFORMATION COMPUTER-BASED INFORMATION SYSTEMS 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

INFORMATION SYSTEMSINFORMATION SYSTEMS

ORGANIZATIONSORGANIZATIONS TECHNOLOGYTECHNOLOGY

MANAGEMENTMANAGEMENT

INFORMATIOINFORMATIONN

SYSTEMSSYSTEMS

1.18

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

**

1.19

ORGANIZATIONSORGANIZATIONS

• OPERATING PROCEDURES:OPERATING PROCEDURES: Standard Operating Procedures Standard Operating Procedures (SOP),(SOP), rules for action rules for action

• POLITICS:POLITICS: Power to persuade, Power to persuade, get things doneget things done

• CULTURE:CULTURE: Customs of Customs of behaviorbehavior

**

1.20

MAJOR MAJOR BUSINESS FUNCTIONSBUSINESS FUNCTIONS

• SALES & MARKETINGSALES & MARKETING

• MANUFACTURINGMANUFACTURING

• FINANCEFINANCE

• ACCOUNTINGACCOUNTING

• HUMAN RESOURCESHUMAN RESOURCES

**

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COMPUTERCOMPUTER TECHNOLOGY TECHNOLOGY

• HARDWAREHARDWARE

• SOFTWARESOFTWARE

• STORAGESTORAGE

• COMMUNICATIONSCOMMUNICATIONS

• NETWORKSNETWORKS

**

1.22

SOCIOLOGYSOCIOLOGY

POLITICAL POLITICAL SCIENCESCIENCE

PSYCHOLOGYPSYCHOLOGY

COMPUTER COMPUTER

SCIENCESCIENCEOPERATIONS OPERATIONS

RESEARCHRESEARCH

MANAGEMENTMANAGEMENT

SCIENCESCIENCE

TECHNICAL APPROACHESTECHNICAL APPROACHES

APPROACHES TO INFO SYSTEMSAPPROACHES TO INFO SYSTEMS

MISMIS

BEHAVIORAL APPROACHESBEHAVIORAL APPROACHES

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SOCIOTECHNICAL PERSPECTIVESOCIOTECHNICAL PERSPECTIVE

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

SYSTEM INTERDEPENDENCESYSTEM INTERDEPENDENCE

BUSINESSBUSINESS

StrategyStrategy

RulesRules

ProceduresProcedures

ORGANIZATION ORGANIZATION INFORMATION SYSTEMINFORMATION SYSTEM

HARDWAREHARDWARE

SOFTWARESOFTWARE DATABASEDATABASE

TELE-TELE-COMMUNICATIONSCOMMUNICATIONS

INTERDEPENDENCEINTERDEPENDENCE

1.25

• 1950s:1950s: TECHNICAL CHANGES TECHNICAL CHANGES• 60s-70s:60s-70s: MANAGERIAL MANAGERIAL CONTROLCONTROL• 80s-90s:80s-90s: INSTITUTIONAL INSTITUTIONAL CORE CORE

ACTIVITIESACTIVITIES

GROWING IMPORTANCEGROWING IMPORTANCE

**

SCOPE OF INFO SYSTEMSSCOPE OF INFO SYSTEMS

1.26

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

NEW OPTIONS FOR NEW OPTIONS FOR ORGANIZATIONAL DESIGNORGANIZATIONAL DESIGN

• FLATTENING ORGANIZATIONSFLATTENING ORGANIZATIONS• SEPARATING WORK FROM LOCATIONSEPARATING WORK FROM LOCATION• REORGANIZING WORK-FLOWSREORGANIZING WORK-FLOWS• INCREASING FLEXIBILITYINCREASING FLEXIBILITY• REDEFINING REDEFINING ORGANIZATIONAL ORGANIZATIONAL

BOUNDARIESBOUNDARIES

**

1.28

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

ELECTRONIC COMMERCEELECTRONIC COMMERCE

• INTERNET LINKS BUYERS, SELLERSINTERNET LINKS BUYERS, SELLERS

• LOWERS TRANSACTION COSTSLOWERS TRANSACTION COSTS

• GOODS & SERVICES GOODS & SERVICES ADVERTISED, BOUGHT, EXCHANGED ADVERTISED, BOUGHT, EXCHANGED WORLDWIDEWORLDWIDE

• BUSINESS-TO-BUSINESS BUSINESS-TO-BUSINESS TRANSACTIONS INCREASINGTRANSACTIONS INCREASING

**

1.30

ELECTRONIC BUSINESSELECTRONIC BUSINESS

• INTRANET:INTRANET: Business builds private, Business builds private, secure networksecure network

• E-MAIL, WEB DOCUMENTS, GROUP E-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

**

1.31

c h a p t e r

11MANAGING THEMANAGING THE

DIGITAL FIRMDIGITAL FIRM