Ch_1

Information Technology (IT):

Computer technology (hardware and software) for processing and storing information

Communications technology (voice and data networks) for transmitting information.

IT has become more pervasive

 IT is not used only by back-office workers, but also front-line workers

 More and more employees are reliant to IT for complete their work activities
 Business managers, not just IT managers, are responsible for IT investments and effective system utilization
 By the Year 2000, the total yearly cost of IT purchases was more than half of the yearly capital expenditures
of businesses in developed countries
 IT is linking emerging, developing and developed economies, which can help “level” the economic playing
field

Computer Hardware: Faster, Cheaper, Mobile

- Computers have become smaller and faster

- Hardware prices have dropped
- High growth in small, mobile devices for communications and access to the Internet

Computer Software: Integrated, Downloadable, Social

 Integrated

- Standardization has enabled more integration

- Many “standards” are just de facto standards (Microsoft Windows, Office, Internet Explorer)
- Many companies have benefitted from “Enterprise Systems” investments (e.g., electronic health records in
hospitals)
Enterprise Systems:
Software packages with integrated modules that pass common business transactions across groups, divisions, and
geographic locations in “real time”

 Downloadable

- Bit-size software programs for smart phones downloadable from App stores
- Download speeds have increased so that even large files can be downloaded by users

 Social

- Growth of Web 2.0 (social media) applications (such as Facebook, LinkedIn)

- Used by companies for marketing and branding activities
- Collaboration tools connect employees across distance

Computer Networks: High Bandwidth, Wireless and Cloudy

- High demand for high speed Internet access

- Wireless technologies to replace hardwired lines; support for mobile devices anytime/anywhere
- Use of Internet to access remote hosts, data storage, and other IT capabilities from the “Cloud”
New ways for businesses to use IT to compete on:
  Low Cost – Competing with other businesses by being a low-cost producer for a good or a service
- Automating transaction time
- Shortening order cycle time
- Providing operational information for decision making
 Differentiation – Competing with other businesses by offering products or services that customers prefer due
to superiority in
- product innovativeness, quality or customer service
- Giving sales personnel information to better serve customers
- Providing just-in-time supplies for customers
- Creating new information-based products
- Allowing product customization by the consumer
 OR Both Low Cost and Differentiation, enabled by IT

New ways for people to work using IT:

1- Telecommuters: Individuals who use mobile technology and/or network connections to work remotely

 Pros

- Flexibility
- Work-life balance
 Cons

- Feelings of being isolated

- Concerns about job promotion opportunities

2- Virtual Teams: Geographically separated work teams whose members communicate through the use of IT

 Pros

- Workers can be located anywhere

- Teams can be composed of members with specialized skills from different business units or companies
 Cons

- Coordination across team members more difficult

3- Free Agents: Individuals who choose to contract out their services and are not tied to an organization

 Pros

- Work may change more than when an employee of a single organization

 Cons

- Lack of benefits
- Unpredictability in scheduling and work

Information Systems (IS) Department:

The organizational unit or department that has the primary responsibility for managing IT

Information Systems departments can vary greatly across businesses, depending on the organization’s dependency
on IT for:

- reliable & secure business operations and

- competitive advantage based on new technologies

Example: IS Organization in Support Mode

- Low Need for New Information Technology for competing

- Low Need for Reliable & Secure Information Technology for business operations
- IT used mostly to support back-office support functions

Example: IS Organization in Strategic Mode

- High Need for New Information Technology for competitive advantage

- High Need for Reliable & Secure Information Technology for business operations
- Strategically dependent on IT to enable new business strategies

Three Types of IT Resources

1- Technology Infrastructure: Computers, software and networks that enable an organization to conduct business
and share information across organizational units as well as business partners

2- Human Resources: IT professionals and managers who have the needed mix of technology, business and
interpersonal skills to plan for, design and manage the other IT resources

3- Business/IT Relationships: Established relationships between business and IT workers to ensure that the other
IT resources are aligned with the business needs

In many organizations, the senior IT leader is a CIO.

Chief information officer (CIO): A firm’s high-level general IT manager with both technology and business leadership
experience

 Two primary responsibilities:

1- Computer and communication operation
2- Acquiring and maintaining application software