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Our Changing

World

Changing the

Rules

Elements of

the Networked

Economy

Infrastructure

of the

Networked

Economy

Information

Technology in

Organizations

A Look Ahead

Review

The Transition to a

Networked Economy

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Our Changing

World

Changing the

Rules

Elements of

the Networked

Economy

Infrastructure

of the

Networked

Economy

Information

Technology in

Organizations

A Look Ahead

Review

Our Changing World

Dependent on computer networks

LANs/Internet/World Wide Web

Moving toward heavy use of electronic

commerce

Relationships are changing at

the corporate level between companies and theircustomers, suppliers, and employees.

the individual level between friends, relatives, andcolleagues.

Moving from an industrial economy to a

networked economy

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Our Changing

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Changing the

Rules

Elements of

the Networked

Economy

Infrastructure

of the

Networked

Economy

Information

Technology in

Organizations

A Look Ahead

Review

Economic Waves

Hunter/Gatherer

Agricultural

Industrial

Knowledge-based

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Our Changing

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Changing the

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Elements of

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Economy

Infrastructure

of the

Networked

Economy

Information

Technology in

Organizations

A Look Ahead

Review

are the nervous system of modern companies

enable stakeholders to interact electronically

are the foundation of what we call the Internet and the

World Wide Web enable and facilitate electronic commerceboth B2C

and B2B

are the basis of a new type of economythe

networked economy

A Connected World:Computer Networks

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Our Changing

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Changing the

Rules

Elements of

the Networked

Economy

Infrastructure

of the

Networked

Economy

Information

Technology in

Organizations

A Look Ahead

Review

Trends in Use of E-commerce

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Our Changing

World

Changing the

Rules

Elements of

the Networked

Economy

Infrastructure

of the

Networked

Economy

Information

Technology in

Organizations

A Look Ahead

Review

Networked economy

Enhanced, transformed, or new economicrelationships based on computer networksand human knowledge

Economic

relationships

Knowledge

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Our Changing

World

Changing the

Rules

Elements of

the Networked

Economy

Infrastructure

of the

Networked

Economy

Information

Technology in

Organizations

A Look Ahead

Review

Stakeholder Relationships

TraditionalCustomers

Employees

Suppliers

NewCustomers as unpaid

employee

Electronic user groups

Employees as special

service representatives

Elements of the Networked Economy:

Economic Relationships

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Our Changing

World

Changing the

Rules

Elements of

the Networked

Economy

Infrastructure

of the

Networked

Economy

Information

Technology in

Organizations

A Look Ahead

Review

Employee

ManagementEmployee

Customer Customer

Suppliers

Organization

Environment

Elements of the Networked Economy:

Economic Relationships

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Our Changing

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Changing the

Rules

Elements of

the Networked

Economy

Infrastructure

of the

Networked

Economy

Information

Technology in

Organizations

A Look Ahead

Review

Scarcity

Searching strategies

Transactions Communications

Information Storage

Differences between Industrial

and Networked Economy

iff i

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Our Changing

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Changing the

Rules

Elements of

the Networked

Economy

Infrastructure

of the

Networked

Economy

Information

Technology in

Organizations

A Look Ahead

Review

Differences between Industrial

and Networked Economy

DigitalAnalogInformation

storage

Many-to-manyOne-to-one, one-to-many

Communication

E-mail, Web,

electronic payments

Face-to-face, phone,

postal, checks, cards

Transactions

Web-basedPaper-based, inperson

Searchingstrategies

TimeLand, capitalScarcity

NetworkedEconomy

IndustrialEconomy

Areas of Change

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Our Changing

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Changing the

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Elements of

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Networked

Economy

Information

Technology in

Organizations

A Look Ahead

Review

Example of Differences--

Purchasing Process1. Requirements

2. Acquisition

3. Ownership4. Retirement

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Our Changing

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Changing the

Rules

Elements of

the Networked

Economy

Infrastructure

of the

Networked

Economy

Information

Technology in

Organizations

A Look Ahead

Review

Purchasing a camera

Ownership process

Requirements

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Our Changing

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Changing the

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Elements of

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Economy

Infrastructure

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Networked

Economy

Information

Technology in

Organizations

A Look Ahead

Review

Purchasing a camera

Ownership process

Requirements

Acquis i t ion

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Our Changing

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Changing the

Rules

Elements of

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Economy

Infrastructure

of the

Networked

Economy

Information

Technology in

Organizations

A Look Ahead

Review

Purchasing a camera

Ownership process

Requirements

Acquis i t ion

Ownersh ip

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Our Changing

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Changing the

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Elements of

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Economy

Infrastructure

of the

Networked

Economy

Information

Technology in

Organizations

A Look Ahead

Review

Purchasing a camera

Ownership process

Requirements

Acquis i t ion

Ownersh ip

Retirement

Old vs. New

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Our Changing

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Changing the

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Elements of

the Networked

Economy

Infrastructure

of the

Networked

Economy

Information

Technology in

Organizations

A Look Ahead

Review

Ten Ways the Rules are

Changing

1. Matter 6. Value

2. Space 7. Efficiency

3. Time 8. Markets

4. People 9. Transactions

5. Growth 10. Impulse

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Our Changing

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Changing the

Rules

Elements of

the Networked

Economy

Infrastructure

of the

Networked

Economy

Information

Technology in

Organizations

A Look Ahead

Review

Matter

It matters less!

Concrete and bricks vs bits and bytes

Value of Amazon.com vs Barnes & Noble

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Our Changing

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Changing the

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Elements of

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Economy

Infrastructure

of the

Networked

Economy

Information

Technology in

Organizations

A Look Ahead

Review

Space

Distance is dead and boundaries no longer

exist!

Communications can take place instantlyover great distances

Competition is worldwide

No company is safe is its local market

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Our Changing

World

Changing the

Rules

Elements of

the Networked

Economy

Infrastructure

of the

Networked

Economy

Information

Technology in

Organizations

A Look Ahead

Review

Time

Its disintegrating

Web year = a fraction of chronological

year Move fast or be left behind!

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Our Changing

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Changing the

Rules

Elements of

the Networked

Economy

Infrastructure

of the

Networked

Economy

Information

Technology in

Organizations

A Look Ahead

Review

People

They are more important than ever

Customers

EmployeesSuppliers

Good ideas are hard to find and worth a

great deal Lock in good employees with stock

options

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Our Changing

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Changing the

Rules

Elements of

the Networked

Economy

Infrastructure

of the

Networked

Economy

Information

Technology in

Organizations

A Look Ahead

Review

Growth

Accelerated by the network

Network-enhanced word of mouth

First-mover advantage worth more

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Our Changing

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Rules

Elements of

the Networked

Economy

Infrastructure

of the

Networked

Economy

Information

Technology in

Organizations

A Look Ahead

Review

Enhanced by network externalities

Metcalfs law

Value

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Networked

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Information

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Organizations

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Efficiency

Buyers can deal directly with sellers

Old-time middlemen are being threatened

Being replaced by infomediaries

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Economy

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Networked

Economy

Information

Technology in

Organizations

A Look Ahead

Review

Markets

Buyers are gaining dramatic new power

Sellers are finding new opportunities

Intelligent software helps buyers find thebest deal.

Businesses that offer unique services or

lower costs will flourish,

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Our Changing

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Changing the

Rules

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Economy

Infrastructure

of the

Networked

Economy

Information

Technology in

Organizations

A Look Ahead

Review

Transactions

It's a one-on-one game.

Information is easier to customize than

hardware and customers will demandcustom products

Information portion of any good or service

is becoming a larger part of its total value.

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Our Changing

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Changing the

Rules

Elements of

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Economy

Infrastructure

of the

Networked

Economy

Information

Technology in

Organizations

A Look Ahead

Review

Impulse

Virtually any product is available

everywhere

No physical barriers between wanting andbuying

The processes for marketing, sales, and

fulfillment are merging.

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Our Changing

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Economy

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of the

Networked

Economy

Information

Technology in

Organizations

A Look Ahead

Review

Category Description ExamplesInternetCompanies

Companies that exist because of the Internet andthe Web.

Yahoo!Mindspring

NewApproaches

Companies that use the Web to carry out already-existing business activities in a new way.

Amazon.com,NetB@nk

Transformed Companies that have used the Web to creatively

destroy theirexisting business, transforming themselves into adifferent type of company or a company that hasdifferent business activities.

UPS,

EdmundsDell Computers

Adapting Companies that are trying to adapt by usingelectronic commerce for an existing business

activity.

Delta Airlines,Lands End

Hurt byElectronicCommerce

Companies that will be endangered by theintroduction of electronic commerce or are ignoringit.

Malls,Constructioncompanies

Affected Company Categories

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Our Changing

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Changing the

Rules

Elements of

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Economy

Infrastructure

of the

Networked

Economy

Information

Technology in

Organizations

A Look Ahead

Review

What is infrastructure?

The underlying foundation or basicframework of a system or an organization.

Information Technology is theinfrastructure of the networked economy

ITconsists of chip-based technology and

communication networks.IT refers to all forms of technology used to

create, store, exchange, and use information inits various forms (http://whatis.com).

Elements of the Networked Economy: Computers

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Our Changing

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Economy

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of the

Networked

Economy

Information

Technology in

Organizations

A Look Ahead

Review

The Evolution of Information Systems

Data

Information

Knowledge

Wisdom

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Our Changing

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Economy

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Networked

Economy

Information

Technology in

Organizations

A Look Ahead

Review

IT in Organizations: IS Functions and the IS

Cycle

Rememberingthe past

Handling the

presentPreparing for

the future

InformationData

Decisions

People

and

technology

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Networked

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Information

Technology in

Organizations

A Look Ahead

Review

IS can help reduce the three risks that businessesface:

Demand Riskrisk of lowered demand

IS can enable improved customer service. Efficiency Riskrisk of higher costs due to

inefficiencies

IS can allow more efficient handling of transactions. Innovation Riskrisk of failing to keep up with

competitors innovations

IR can be reduced through appropriate new uses of IT.

Using IS Functions to deal with Business Risks