Questions from last class?

What is Technology?

Any current events?

Technology & Business in the

News?

ASM is serious about prerequisites…

MGMT 300 - OperationsMGMT 303 - AccountingMGMT 306 - Diversity

MGMT 322 - Marketing

•First Mossberg Write Uphttp://ptech.wsj.com/

Due February 7th Personal Technology column

comes out on Thursday in the WSJ

Mgmt 450Chapter 1

Foundations of Information Systems in

Business

Why do you need

to take this

class?

All managers, entrepreneurs and

business professionals need a basic understanding

of information systems

Discussion question – page 61, #10

in chapter 2“We have learned that it is not

technology that creates a competitive edge, but the

management process that exploits technology.”

(Peter Keen – well regarded academic, consultant and speaker on IS topics)

“There is no longer any distinction between an IT project and a business initiative. IT at Marriott is a key component of the products and services that

we provide to our customers and guests at our properties. As such, there’s very little that goes on within the company that either I personally or one

of my top executives is not involved in.”

Carl WilsonExecutive VP and CIOMarriott International

(page 5)

“Executives need to stop looking at IT projects as technology installations and

start looking at them as periods of organizational change that they have a

responsibility to manage.”

Mastering the Three Worlds of Information Technology

Harvard Business Review, Nov 2006

Does this mean that information systems is

the answers to everything?

(the magic pill or silver bullet?)

2005 Survey – Financial Executives Research Foundation

(782 executives responding)

• 50% reported aligning business and IT strategy was a problem

• 51% reported major IT initiatives ran behind schedule and over budget

• 47% felt ROI was high for IT investments

Why has TJX Companies (T.J. Max)

been in the news?

Why has TJX Companies (T.J. Max) been in the news?

• $150 million in losses due to a massive security breach

• 45.6 million customer credit cards impacted over 18 months

• Lots of pending litigation

Three Reasons to Learn This Stuff:

(page 7)

1. IS supports many business processes and operations

2. IS supports decision making for management and employees

3. IS supports business strategy and competitive advantage

Information Systems (IS):

Organized combination of people, hardware,

software, communications networks, and data

resources that collect, transform, and

disseminate information (page 2)

Knowledge workers:

Workers who use information and

knowledge as the raw materials of their work and the product of their

work.

Digital Divide

•Technically savvy versus computer illiterate

• Unlimited access to technology versus limited/none

Social inequity that has emerged in the digital age

System Development

Life Cycle

(page 17):

Components of a system (page 31):

BabyFood

1. Input

2. Processing

4. Output

5. Feedback

6. Monitoring/Control

3. Storage

1. Input 2&3. Processing & Storage

4. Output

6. Monitoring/Control

5. Feedback

Resources (page 28)

People

Hardware

Software

Networks

Data …

• Raw facts • Observations• Not processed (yet)• Not meaningful to

the audience/reader

Lindsey

100

791545

Mann

Naranjo

1200

Meleh

yes

Information …

• Processed data– Summarized

– Organized

– Labeled

• Meaningful to the audience

Monthly Sales Report for West Region

Sales Rep: Charles MannEmp No. 791545Item Qty Sold PriceTM Shoes 1200 $100

Discussion Question #4(page 34)

Why do big companies still fail in their use of information technology?

“Most managers feel ill equipped to navigate the

constantly changing technology landscape and thus

involve themselves less and less with IT.”

Mastering the Three Worlds of Information Technology

Harvard Business Review, Nov 2006

Chapter 2Leveraging

Technology for a Competitive

Advantage

January 2008 – Harvard Business ReviewFive Competitive Forces That Shape Strategy

www.hbr.org

Basic Competitive Strategies

Cost LeadershipCost Leadership

DifferentiationDifferentiation

InnovationInnovation

GrowthGrowth

AllianceAlliance

Figure 2.2 – page 43

Strategic Information Systems Page 40

Any kind of IS that uses information technology to help an organization:

• Gain a competitive advantage

• Reduce a competitive disadvantage

• Meet other strategic enterprise objectives

Examples of how companies have used information technology to implement the

five competitive strategies

Page 46 – Figure 2.4

Business Process Reengineering (BPR)

Page 51

Fundamental rethinking and radical redesign of business process to achieve

dramatic improvements in cost, quality, speed, and service.

See quotation on the changing competitive environment

page 55

“Agile Competitors and Virtual Organizations: Strategies for Enriching the Customer”

Steven Goldman, Roger Nagel, Kenneth Preis

Measuring success & failure with ITpage 15

IS need to be measured NOT ONLY by its efficiency (minimize costs, time & use of

information resources) BUT

Measuring success & failure with IT page 15

Also measure EFFECTIVENESS of IS in: • Supporting an organization’s business strategy

• Enabling its business processes

• Enhancing its organizational structures & cultures

• Increasing customer & business value

Measuring success & failure with IT page 16

IS can be mismanaged and misapplied in such a way that IS performance problems create both technological and business failure.

… so technology is not the silver bullet that solves all the problems…

Six IT Decisions Your IT People Shouldn’t Make

HBR Nov 2002

•How much should we spend on IT?

•Which business processes should receive our IT $$?

•Which IT capabilities need to be companywide?

•How good do our IT services really need to be?

•What security & privacy risks will we accept?

•Whom do we blame if an IT initiative fails?

Textbook Breakdown

• Foundation

• Technologies

• Business Applications

• Development

• Management Challenges

We will spend the next 4 weeks here!

Assignment for next class

• Read “Electronic Birth Registration in Bangladesh” on page 17

• Real World Case #1 Continental Airlines

• HBR article excerpt re: 5 competitive forces

• Be prepared for discussion

Forces That Shape CompetitionThe configuration of the five forces differs by industry. In the market for commercial aircraft, fierce rivalry between dominant producers Airbus and Boeing and the bargaining power of the

airlines that place huge orders for aircraft are strong, while the threat of entry, the threat of substitutes, and the power of suppliers are more benign. In the movie theater industry, the

proliferation of substitute forms of entertainment and the power of the movie producers and distributors who supply movies, the critical input, are important.

The strongest competitive force or forces determine the profitability of an industry and become the most important to strategy formulation. The most salient force, however, is not always obvious.

For example, even though rivalry is often fierce in commodity industries, it may not be the factor limiting profitability. Low returns in the photographic film industry, for instance, are the result of a superior substitute product—as Kodak and Fuji, the world’s leading producers of photographic

film, learned with the advent of digital photography. In such a situation, coping with the substitute product becomes the number one strategic priority.

January 2008 – Harvard Business ReviewFive Competitive Forces That Shape Strategy

www.hbr.org

** This article is currently available in full for free from the HBR web site