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Lecture 13 – Revision and Reflection

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Lecture 1

CHANGING ROLE OF THE INFORMATION PROFESSIONAL

The concept of Information Enterprise The notion of Information Enterprise needs to be distinguished from that of Enterprise Information. Information Enterprise is the broader concept. It refers to a situation where information professionals or practitioners identify information needs or opportunities, and work pro-actively to create, develop or maintain information products or services to meet those needs, or take advantage of those opportunities. Information needs are generally identified among existing information communities (otherwise called virtual communities or human information networks). Seizing information opportunities may well involve participation in the development of new information communities.

Comparing Enterprise Information and Information Enterprise. Enterprise Information, in contrast, refers to the information flows and recorded information resources required for a business or other purposive activity to operate (Example: Registrars of Births, Marriages and Deaths)

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Lecture 2 - The Business Case and Business Plans

Basically, a good business plan should establish a link between the proposed activity and the desired outcomes, by:

1.providing a written summary of what you hope to accomplish;

2.helping organize available resources to meet your goals;

3.establishing relationships between different tasks and projects;

4.providing a means of measuring progress; 5. identifying what finance is needed and when; 6. identifying potential problems; and 7.encouraging realism.

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Lecture 3 - VIRTUAL COMMUNITIES

• A classic definition of virtual information/ knowledge community, based on the early work of Rheingold (1995) would be as follows: 'except instead of being rooted in a physical place, it is a locality in cyberspace’. Dimensions of virtualisation include: • Location - with the parties involved being physically separated,

usually at a considerable distance from each other; • Time - practically instantaneous communication globally, and a

choice between synchronous (same time) and asynchronous (different time) modes of communication and collaboration.

• Flexible structures and processes - eg an ability to work in parallel on a task rather than sequentially, virtual teams, virtual organisations.

• Castells (2002) sought to update our conception of virtual community. His excellent Chapter 4 in The Internet Galaxy is entitled 'Virtual Communities or Network Society'. Core to his discussion is Wellman's definition of community, quoted on page 127: Communities are networks of inter-personal ties that provide sociability, support, information, a sense of belonging and a social identity.

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Lecture 3 - Virtual Communities

Knowledge networking comprises two dimensions: •Computer networking - the technological infrastructure, the physical 'nodes' and 'links' that facilitate interconnection and the free flow of information - locally and globally. Also the collaborative software applications that facilitate knowledge sharing. •Human networking - people communicating with each other, collaborating, sharing ideas, combining perspectives, creating new knowledge, generating novel ideas and solutions to problems. While the technological infrastructure is a necessary pre-requisite for human networking in virtual communities, it remains the tool - the human element is the vital spark in innovation. Sociograms (or sociometric diagrams) are one means of representing knowledge/ information networks diagrammatically. Each person is recorded as a numbered node, and communication links are shown with connecting arrowed lines.

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Lecture 4 - Information Enterprise and the Pricing of Information

Products and Services

R.S. Taylor (1986) explained the concept of added value as:

Value of outputs > cost of inputs + processing

'Cost Drivers' and 'Value Drivers' In examining activities throughout the Value Chain, two major types of 'drivers' are isolated and analysed: Cost drivers: Factors that contribute significantly to costs of performing activities/ that contribute a significant proportion of total costs. Value drivers: Factors that contribute significantly to customer value/ that contribute a significant proportion of total value. These relate to the two major types of competitive advantage identified earlier: being a low cost producer, or differentiating products/ services through adding some type of unique value to a consumer. Associated strategies are gaining cost advantage by controlling the cost drivers of activities that represent a significant proportion of total costs; and gaining differentiation advantage through 'value-adding' in activities that make the greatest contribution to total customer value.

Porter identified the following ways of controlling cost drivers: Controlling scale: Selecting the most appropriate scale economies for the product/ service. Controlling learning: Keeping learning proprietary, but where possible exploiting the learning of competitors. Controlling the effect of capacity utilisation: ie The varying levels of throughput, fluctuations in volume. Controlling linkages: Recognising and exploiting linkages amongst value activities. (information systems are important here). Controlling interrelationships: eg The ability to reduce costs by sharing value activities with sister units. Controlling integration and de-integration Controlling timing: First mover advantages vs later mover advantages (ie learning from competitors who have borne development costs). Controlling discretionary policies Controlling location: Of activities and buyers. Controlling institutional factors: eg Government policies, unionisation.

SHAPIRO AND VARIANInformation is costly to produce but cheap to reproduce ie it entails high fixed costs but low marginal costs (a movie or software package costing $100 million to produce can be copied on magnetic or optical media for a few cents). Pricing is thus quite different from, say, manufactured goods. A 10% or 20% mark-up makes no sense when the unit cost is near zero. Information goods must be priced according to consumer value not production cost. In contrast, computer hardware and network technology are priced at cost plus mark-up. It thus follows that differential pricing is a normal feature of information enterprise. Different markets often are prepared to pay different amounts for the same information. Intellectual property is a necessary condition of information enterprise, but too protective an attitude can damage sales. Information is an experience good. An experience good is one which people must experience in order to value it. Information enterprises must have strategies which allow customers to get an idea of what they are deciding to buy eg through browsing, demo software, and strong brand names such as 'Wall Street Journal', 'Reuters', 'Disney' or 'Playboy'. The tension between giving away your information - to let people know what you have to offer - and charging for it to recover your costs is a fundamental one in the information economy. (Shapiro and Varian, p.4).

Nobel prizewinner Herbert Simon has said 'a wealth of information creates a poverty of attention'. The most crucial stages in the value chain are those that involve selecting and filtering/ targeting. Without hardware and network technology (the lower part of the IT Pyramid) - and in the analogue world the technology of print - information products could not be created and disseminated. In relation to such technology the following aspects are important for information enterprise:

System compatibility/ interoperability. Lock-in (ie the extent to which choice of a particular systems makes you dependent on a specific supplier) and switching costs (ie the cost of migrating to a new system). Positive feedback (ie extremes in the marketplace where the strong get stronger and the weak get weaker, leading to a dominance of the market by a single firm or technology, a 'winner take all' scenario). Network externalities (users prefer large to small networks, and benefit from externalities - things not paid for when purchasing a productñeg being able to communicate with a large group of other people who use the same system or technology). Standards (to ensure compatible systems and complementary products). 'Standards Wars'. Open standard (Collaboration strategy): set through participation with allies within an industry who negotiate and agree on the standard. Proprietary standard (Go-it-alone strategy): one firm fights to have its standard adopted as the standard for the industry.

The policy environment ('level playing field') is also crucial for information enterprise.

Pricing of information products

The three key strategies are: Personalised pricing: Sell to each user at a different price, e.g. commissioned consultancy reports, individualised literature searches (Compare with airlines which have dozens of different fare categories on the same flight) Versioning: Offer a product line and let users choose the version of the product most appropriate for them - e.g. subsets, features, time-delays (Compare with 'regular', 'large' and 'jumbo' fries) Group pricing: Set different prices for different market segments eg student discounts, library pricing. Take account of:

Price sensitivity (i.e. at what price point will customers refuse to buy)Segmenting the marketLock-inOther issues 

Sorry everyone – there was a technical hitch with the remainder of slides. However the following is a list of some other important models/concepts to revise:

• Porter and Millar’s Industry Attractiveness Model• Cost drivers and value drivers• Sproull and Kiesler’s two level perspective• Thompson’s Technology Classification• Fisher and Fisher’s Virtual Knowledge Teams• Castells/Wellman’s concept of ‘networked individualism’• Digital divide• The Information Flows Model

Good luck for the exam! [END]