Chapter 1 Managing in the Digital World Section one Information Systems Today Items of Value in the Knowledge Society Information Capital Land Labor Rise of the Information Age 1 Agriculture and Handwork Provided the time and resources for people to stay in one location and invent machines 2 The Industrial Revolution Provided the tools such as the printing press necessary to replicate information and widely disseminate it in a low cost manner Changes in Organization and Society Mobile Computing Leads to both opportunities and challenges for both managers and for o Employee can conduct business almost anytime anywhere o Customers having their phone on them 24 7 are able to be reached throughout the marketers day Social Media Emerged as a dominate force in online socialization o Can leverage social media to communication with customers o Business Intelligence can be conducted mining social media sites for good and bad sentiment towards business and factors driving it Big Data Pose Tremendous challenges for business Cloud Computing Beginning of the Fourth Wave o Requires connectivity to function o Mobile Computing has further added to the value of the cloud metaphor Consumerization of IT Occurs when employees use consumer devices and or software to facilitate their work Section 2 Evolution of Globalization Outsourcing Moving of business processes or tasks to another company o Facilitated by declining telecommunication costs o Driven cost reduction Undertaking when another company can perform a process at a lower cost than yours o Doesn t automatically imply moving work overseas o Multiple competitive advantages including lower labor costs Some key reasons for Outsourcing o To reduce or control costs o To free up internal resources o To gain access to world class capabilities o To increase revenue potential of the organization o To reduce time to market o To increase process efficiencies o To be able to focus on core activities o To source specific capabilities or skills Challenges of Operating in the Digital World Government Geopolitical Cultural o Political instability o Regulatory privacy control standards censorship o Time zones infrastructure o Workforce welfare demographics expertise o Working with providing services too Section three Information Systems Defined Data raw feedstock of information systems Once processed and analyzed it becomes information Knowledge ability to understand information form opinions and make decisions or predictions based on the information Five Components of Information Systems 1 People 2 Telecommunication 3 Hardware 4 Data 5 Software These components need to all work together to make information systems effective and efficient Information Systems can help organizations Be more productive and profitable Gain a competitive advantage Reach more customers Improve service to their customers This holds true for all types of organizations Professional Social Religious Educational and Governmental Section IS Ethics IS Ethics are critical parts of managing Information Systems Computer Ethics Describes the moral issues and standards of conducts as they pertain to the use of information systems PAPA Privacy Accuracy Property Accessibility Code of Ethical Conduct The guidelines prohibit Using a computer to harm others Interfering with other people s computer work Snooping in other people s files Using a computer to steal Using a computer to bear false witness Copying or using proprietary software without paying for it Using other s resources without authorization or compensation Appropriating other people s intellectual output The guidelines recommend Review social consequences of programs and systems you design Use computers in ways that show consideration and respect for others Digital Divide People that are left behind either by choice of through lack of opportunity Chapter 2 Gaining Competitive Advantage through IS Section 1 Enabling Organization Strategy through Information Systems Organization Decision Making Levels Executive Strategic Level Upper Management Focused on long term strategies business decisions such as how to compete price versus quality and what countries to do business with Middle Tactical Level Middle Management Focused on running the organization to meet the strategic goals and typically has a management timeframe of 2 to 12 months Operation Level Operational Employees Foremen and Supervisors Op employees and management perform the day to day work of the organization Making decisions on a day by day basis Store manager would be considered the lowest level of Middle or Tactical Management Information Systems can track and identify trends and seasonality Managers use this to plan staffing levels and cross training Information Systems can help offset many competitive forces such as Computer Aided Design to help firms meet customer demands when customers have a high degree of bargaining power Accessing Value for the IS Infrastructure Economic Value Direct Financial Impact Architectural Value Extending business capabilities today and in the futures Operation Value Enhancing ability to meet business requirements Regulatory and Compliance Value Complying with regulatory requirements Section 2 International Business Strategies in the Digital World Four International Business Strategies 1 Home Replication Information not a significant factor in facilitating international export sales a Focused Domestically b 2 Global a b Requires subsidiaries to ensure an understanding of how the product is being Intended for a global audience and designed to appeal across the global audience received 3 MultiDomestic 4 Transnational c Focus is on global product appealing across many markets a Tend to be run by individual IS departments within each subsidiary a Is sophisticated and complex requiring extensive information sharing between different subsidiaries as well as between each subsidiary and the home location or locations Communication by information systems and the Internet o The pace of change is fast Smart rival quickly adopt any advantages Section 3 Valuing Innovations Innovation is often fleeting Innovation is often Risky o Competition Tech results in winner and a loser Innovation Choices Are often Difficult o Impossible to pursue all opportunities o Hard to predict which opportunities will lead to success Organizational Requirements for Innovation Process Requirements Resource Requirements Risk Tolerance Requirements The E business Innovation Cycle