BADM 350 Lecture 5 Outline of Current Lecture II. Summary of IT doesn’t matterA. Themes, Context, Critical thinking pointsB. Proprietary Technologies definitionC. Infrastructural Technologies definitionD. Risks associated with IT for companiesIT Doesn’t Matter SummaryOverarching themes: We need to spend less on ITContext: This article was written after the .com bust in the 1990’s. All of the statistics are from 2002.Critical thinking: Do you agree or disagree and why?We need IT, but since now every company has it, it doesn’t give an advantage to companies anymore. It just brings companies on a level playing field.Follow others, don’t lead. Once the technology has been invented, figure out how to make the technology better.By 2000, almost 50% of the capital expenditures of American companies went to information technology. Businesses around the world spend over $2 trillion a year on IT.Proprietary technologies- can be owned, actually or effectively, by a single company. Ex. Patents,rights to materialThey can be the foundations of long term strategic advantages, enabling companies to reap higher profits.Infrastructural technologies- offer far more value when shared than when in isolation. - Ex. Rail roads, telegraph lines, power generators- it is far more valuable when shared than when in isolationThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.The increased supply of technology has decreased the price of new technology. The number of computers connected to the internet grew from 80,000 to 125 million from 1989 to 2001. Sincethe 1980’s more than 280 million miles of fiber-optic cable have been installed which is enough material to circle the earth 11,320 times.Once companies buy IT systems, they may not need to buy again for a very long time. IT companies have started to charge per year so they can get money indefinitely (turning them into utilities)“When a resource becomes essential to competition but inconsequential to strategy, the risks it creates become more important than the advantages it provides”Operational risks include technical glitches, obsolescence, service outages, unreliable vendors orpartners, security breaches, even terrorism. They can paralyze production, destroy reputations, and usually, cost companies huge amounts of money.Data storage has become more than half of many companies IT