Role&ImpactsofIS Role & Impacts of IS

Whatdoesinformationmeantous? What does information mean to us?

Uses of information Usesofinformation
Decision making Decisionmaking Communication L Learning,Growth&Development i G th & D l t Entertainment M bili Mobility Survival

ExpectationsofIS Expectations of IS
WhatISDoes at S oes (Functions) Capture Process Generate Store Retrieve Transmit

WhatISDelivers... (Benefits) (B fit ) Speed Consistency Precision Reliability R li bilit

SystemAcceptability System Acceptability (Shneiderman)

Learnability:Howeasyisitforuserstoaccomplishbasictasksthe firsttimetheyencounterthedesign? fi t ti th t th d i ? Efficiency:Onceusershavelearnedthedesign,howquicklycan theyperformtasks? they perform tasks? Memorability:Whenusersreturntothedesignafteraperiodofnot usingit,howeasilycantheyreestablishproficiency? using it how easily can they reestablish proficiency? Errors:Howmanyerrorsdousersmake,howseverearethese errors,andhoweasilycantheyrecoverfromtheerrors? errors and how easily can they recover from the errors? Satisfaction:Howpleasantisittousethedesign?

Levels of Impact LevelsofImpact

Global/InternationalTrade Global / International Trade NationalEconomy National Economy EconomicSectors Economic Sectors IndividualOrganisations Individual Organisations ManagementFunctions g

GlobalTrade&NationalEconomy Global Trade & National Economy

Greaterparticipationinforeigntradereduces incomeinequalityforallcategories income inequality for all categories Globaltradeintechnologyintensiveproducts registeredthehighestgrowthrateinallthe regionsexceptLatinAmerica

Role&(Relative)Importance Role & (Relative) Importance

Informationandcommunicationtechnology(ICT)infrastructureis essentialtotherapiddevelopmentofemergingeconomies[1] essential to the rapid development of emerging economies [1] OpposingView:ToomuchstockisgiventoICTexpansionasanengineof growth,whilenotenoughattentionisgiventohumancapital,health,and civilinfrastructure(roads,cleanwater,electricity,etc.)[2] i il i f ( d l l i i ) [2] Countered:ICTinfrastructureexpansion:
facilitates the movement of capital and the coordination of global production facilitatesthemovementofcapitalandthecoordinationofglobalproduction andtransportation allowsfornewmethodsofcrossborderinvestmentsandtheexpansionof services services

activitiesvitaltothenewglobaleconomy connectivityandseamless communicationarerevolutionizingthestructuresofeconomicexchange. [3]

R&RI2 R&RI2
TheimpactofICTsextendsbeyondtheeconomicdomain,with+ve spillovereffectsonvariousdimensionsofsociallife:
enhancelearning[1.a] improvehealthcare[1.b] empowermarginalizedwomen[1.c] promoteindigenousknowledge[1.d] promote indigenous knowledge [1.d] maintaingoodgovernance[1.e]

DevelopingcountriesmaynotseethesamereturnsontheirICT investmentsasdevelopedcountries.ICTbeginstodelivergrossdomestic i d l d i ICT b i d li d i product(GDP)percapitagrowthonlyafteracertainthresholdofICT developmentisattained.[2] Unlikedevelopedcountries,developingcountrieshavelittleofthe supportinginfrastructurenecessaryfortheexpansionandutilizationof theproductivecapacityofICTs[3]

Govts must cultivate conducive environment / determine impacting factors Gov ts mustcultivateconduciveenvironment/determineimpactingfactors Networkexpansion&efficiency&Privatisation

Observations LatinAmerica Observations Latin America

EconomicfactorsarecorrelatedwithICTexpansion(95% conf.) ICTservicesarepricesensitive ICT services are price sensitive UniversitieshavethelargestimpactonICT
Instit tions are net sers of ICT InstitutionsarenetusersofICT Graduateshavehigherannualincomes GraduatesengageICTintheirproductivecapacity

ICTexpansionisafunctionof(road)transport infrastructure

EconomicSectors Economic Sectors

Transportation a spo a o Education Security y HealthCare Printing&Packaging Food&Beverage Travel,Transportation& Transshipment Science,R&D,Innovation Energy&Industry e gy dus y Agriculture Banking&Finance g Construction Education Media,Music& Entertainment Advertising ProfessionalServices

WhatisanOrganization? What is an Organization?

Like other social sciences diverse perspectives: Likeothersocialsciences,diverseperspectives:
Classical:structureandrequirementstosustainit HumanRelations:people;groupandindividualneeds Systems:responsetoexternalandinternalinfluences Contingency:balanceofanumberofkeyvariables (structure;strategy;staffingetc.)

Organization Organization Definitions

intricatehumanstrategiesdesignedtoachieve objectives~Argyris (1960) systemsofbehaviour designed to enable humans and systems of behaviour designedtoenablehumansand theirmachinestoaccomplishgoals~Simon1979 systemsofinterdependenthumanbeings~Pugh (1990) ameansofworkingwithotherstoachievegoals~ Stewart(1994)

Purpose
Government: (State) Governance and Government:(State)Governanceand Administration Civic: non profit (special interest) motives Civic:nonprofit(specialinterest)motives Businesses:ProfitMotive Drucker:purposeisnottoearnprofit;profitis p p p ;p ameasureofhowwellthebusinessperforms i.e.creatingacustomer(ortransaction) g ( )

OrganizationTypesorModels Organization Types or Models

Proprietor(SelfOwner) p ( )
SoleTraders
FamilyBusiness

Ownershipof Assets:
E Exposureto t Liability ShareofProfit

Partnerships
General e ea Limited

Corporations
PrivateLimitedLiability Public Limited Liability PublicLimitedLiability

Controlof Operations:
DecisionMaking Execution Authority Communication

StrategicrolesofITfallintooneofthreecategories: Strategic roles of IT fall into one of three categories:

1. 2. 2 3. workinginward(improvingafirmsinternalprocessesand structure) working outward(improvingthefirm sproductsandrelationships workingoutward (improving the firms products and relationships withcustomers)and workingacross(improvingitsprocessesandrelationshipswithits businesspartners)

Egs: Grainger,GEPowerSystems,WireNovaScotia,TheShipping g , y , , pp g Industry,CiscoSystemsandUPSSupplyChainSolutions, Semco,S.A.,ADayintheLifeofanElancer,GeneralMills andLandOLakes,SaraLeeBakeryGroup,andDell Computer

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Introduction

WorkingInward: Connectivity&Belonging WorkingOutward: Customers&Services WorkingAcross: W ki A Suppliers&Backoffice

Figure31StrategicUsesofInformationSystems
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Introduction
Use of the Internet by businesses in mid/late 90s UseoftheInternetbybusinessesinmid/late 90s setoffarevolutionintheuseofIT
Utili i th I t UtilizingtheInternettoconductbusinessbecamethe tt d tb i b th strategicuseofIT
Strategic=havingasignificant,longtermimpactonafirms h f l f growth,industryand$$

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Introduction
Last20Years StrategicUsesofIT

Mid 1980s Mid1980s,

hottopic=endusercomputing(working inward)
HelpemployeeslearnaboutPCs

Late 80s Late 80s

strategicusefocusedoutwardtogain competitiveadvantage competitive advantage
Nowconsiderednormal=competitivenecessity Vs.competitiveadvantage p g
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Introduction
Last20Years StrategicUsesofITcont.

1990s
Strategicuseattentionturnedinwardto reengineeringbusinessprocesses reengineering business processes
Intent =nottoautomateexistingprocessesbutto Intent not to automate existing processes but to totallyredesignhowtheenterpriseoperated IntroductionofERPsystemswasalsoaimedat internaloperations,specificallyprovidingsingle sourcesofdataenterprise wide sources of data enterprisewide
319

Introduction
Last20Years StrategicUsesofITcont.

1990s cont 1990scont.

Internetspotentialbecomingevident
Dot coms =lookedatitsoutwardusetogaina Dotcoms looked at its outward use to gain a competitiveadvantage MostestablishedfirmsinitiallyusedtheInternet technologyinternally,buildingintranetstoimprove companyprocesses
Publishingeforms Accompanyingworkflowprocesses
320

Introduction
Last20Years StrategicUsesofITcont.
late 90s late 90s
UseoftheInternetforbusinessunderway
Burstingofthedotcombubble EBusinesshasbecomemorerealitybased i h b li b d IntegrationoftheInternetintohowcompaniesworkhas proceeded

early00s
Theme =leveragingtraditionaloperationsbyusingthe Theme leveraging traditional operations by using the Internettoworkmorecloselywithothers
Innovations of the dotcoms created competitive challenges Innovationsofthedot coms createdcompetitivechallenges forbricksandmortarfirms
2006BarbaraC.McNurlin. PublishedbyPearson Education. 321

Introduction
Last20Years StrategicUsesofITcont.
2005
Somethinghaschanged
EspeciallywithregardstotheuseofITforcompetitive advantage

SomemayquestionITsabilitytogivecompaniesa bl competitiveedgebutitisabsolutelynecessaryfor competitiveparity p p y

Beingusedstrategically:
Inward Outward Across
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Introduction
WhithertheInternetRevolution?
Internet frenzy peaked in 2000 Internetfrenzypeakedin2000 IstheInformationRevolutiondead?
Not if history is any guide Notifhistoryisanyguide
BritishRailwayRevolution mid1800s 10foldincreaseaftertheboom
Duringboom=greatexcitementandsmallcompanies flourished After=glamourgone.Businessbecameseriousandfullofhard work Industrybecameorderlyandprofitsbegantoreflectrealreturns

Connectingindustries
R Raceforspacefollowedbytherealdeal f f ll d b th l d l
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Introduction
WhithertheInternetRevolution?cont.
We are now in a period where organizations are Wearenowinaperiodwhereorganizationsare rearchitectingthemselvesaroundInternet technologies
Tearing down old structures as they go Tearingdownoldstructuresastheygo

RealgainswillcomewhenInternettechnology adaptstoorganizationsandpeople d d l
Whenthetechnologydisappearsandbecomespartof life

Itwillbequietcomparedtofrenzyof99/00but manythinkitwillbeagiantrevolution
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Introduction
TheCheapRevolution
CIOs are shifting from buying expensive proprietary products CIOsareshiftingfrombuyingexpensiveproprietary products tobuyingcheapgeneric products
CheapTech

Cost savings are compelling Costsavingsarecompelling

Google=runson100,000cheapservers
Onebreaks=discards
Avoids expensive service contracts and in house staff Avoidsexpensiveservicecontractsandinhousestaff

Dellification
MovedfromsellingPCstoalsosellingservers,printers,storagedevices.

Cheapisoccurringelsewhere: Cheap is occurring elsewhere:

Labor outsourcingtoothercountries Filmproduction camcordersetc. Software LinuxVs.Microsoft Telecommunications VoiceoverIP
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EBusinessDrivers us ess es
Key Components that have accelerated the rapid growth and KeyComponentsthathaveacceleratedtherapidgrowthand acceptanceofebusiness: Wideaccesstoapublicnetwork
Standardcommunicationprotocol Standarduserinterface

E business applications run over the Internet drastically EbusinessapplicationsrunovertheInternet,drastically reducingaccessandcommunicationscosts

PreInternet 95%ofFortune500usedEDIVs.2%ofallU.S.companies

Withstandardizedcommunicationprotocolsanduser interfaces,implementationandtrainingcostsarefarlower As a result a much broader set of users and firms has access to Asaresult,amuchbroadersetofusersandfirmshasaccessto thesystems,allowingrapidgrowth
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DoesITStillMatter? Does IT Still Matter?

IT Doesnt Matter article by Nicholas Carr in ITDoesn tMatter articlebyNicholasCarrin HarvardBusinessReviewMay2003
Bottomline=ITdoesntmatteranymore,atleastnot strategically
ITisaninfrastructuretechnology,likerail,electricity, gy, , y, telephoneetc.
Suchtechnologycancreateastrategicadvantageforan individualfirmatthebeginningofitslifecyclewhenitis expensiveandrisky expensive and risky

Carr=ITisnowattheendofbuildoutandisneither proprietaryorexpensive
=Acommoditywhichisavailabletoanyoneandwontgiveany y y g y individualfirmacompetitiveadvantage
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DoesITStillMatter?cont. Does IT Still Matter? cont

Reachedtheendofitsbuildout:
1. 2. 3. 4. 5. PowerofITnowoutstripstheneedsofbusiness ITpriceshavedropped=nowaffordable CapacityofInternethascaughtupwithdemand(fibresurplus) Manyvendorswanttobeseenasutilities Investmentbubblehasburst

Whenaninfrastructuretechnologyreachestheendof itsbuildout,itsimplybecomesacostofdoingbusiness AlthoughITisnecessaryforcompetitiveness, Competitiveadvantagecomesfromthefirmsbusiness model

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MISManager:Considerations2
The Role of IS is changing TheRoleofISis
1960s 1970s 1980s 1995+

RoleofIS

Efficiency

Effectiveness

Strategic

ValueCreation

Justification ofIS f IS

ROI

Productivity& Quality Q lit

Competitiveness p

AddingValue g

MISManager:Considerations
IS has to support (or enhance) business goals and IShastosupport(orenhance)businessgoalsand organiastional systems. IScontributestoboththerevenueandexpense sidesoftheBalanceSheet.NeedtoconsiderIS Strategies. Technologysupportsandconsumessignificant resourcesofanorganization.Needtoevaluate investmentperformanceandinformationneeds. i f di f i d

ITCapitalInvestment

Informationtechnologyinvestment,definedashardware,software,and Information technology investment defined as hardware software and communicationsequipment,grewfrom32%to51%between1980and2008.

ITCapitalInvestment IT Capital Investment

Totalinvestmentreachedonetrilliondollarsin2008,withover500 billiondollarsofthatinvestedininformationtechnology. billion dollars of that invested in information technology.
WhyitisthatthepercentageoftotalinvestmentdevotedtoIThas increasedsomuchsince1980?

Otherkindsofcapitalinvestmentaremachineryandbuildings. WhywouldfirmsincreaseITinvestmentfasterthanmachineryand buildings. buildings

Capitalsubstitution:thepriceofITcapitalhasbeenfalling p y, p g exponentially,whilethepriceofmachineandbuildingshasbeen growingatslightlymorethantherateofinflation. Whereverpossible,firmswouldmuchratherinvestinmoreITthan machineryorbuildingsbecausethereturnsontheinvestmentare machinery or buildings because the returns on the investment are greater.Whynotinvestintelework ITsystemsratherthanbuildingan expensivenewofficetower?

VariationinReturnsonITInvestment
Although,onaverage, investmentsin information information technologyproduce returnsfarabove thosereturnedby th t db otherinvestments, thereisconsiderable variationacrossfirms.

VariationofITReturns Variation of IT Returns

Quadrant1representsfirmsthatinvestmuchlessin p ITbutstillreceivestrongreturns. Quadrant2representsfirmsthatinvestagreatdeal inITandreceiveagreatdealinreturns. Quadrant3representsfirmsthatinvestmuchlessin ITandreceivepoorreturns. p Quadrant4representsfirmsthatinvestagreatdeal inITbutreceivepoorreturns. b

EconomicImpactsofIS Economic Impacts of IS

Costs of Capital (Building & Equipment; CostsofCapital(Building&Equipment; Services) Costs of Labour CostsofLabour CostsofProduction ManagementCosts CostsofInformation CostsofMarketParticipation&Engagement

SocialImpactsofIS Social Impacts of IS

FlatterOrganizationStructures
C CommunicationReach i ti R h AutomatedInformationAccess

Decisionmakingcycletimes Type of Work TypeofWork

TechnologyInteraction

NatureofWork
Work from home; on site; in transit; Workfromhome;onsite;intransit; Teambasedcoordination&collaboration

MeasurementofEffort(trendtowardsdeliverables) Consider:
Shifttowardknowledgebasedwork Lifestyle preferences and mobility Lifestylepreferencesandmobility ProductivityParadox:areemployeesmoreefficient?

OtherDimensions Other Dimensions

Culture:
NormsandValuesthatguidebehaviour andpriorities

Learning
Access DeliveryMethods Application (Simulations) Application(Simulations)

Motivation
Processofengagement

Change
Process&Speedofchange