MANAGING

INFORMATION
TECHNOLOGY
FIFTH EDITION

CHAPTER 1

MANAGING IT IN AN E-WORLD

E. Wainright Martin  Carol V. Brown  Daniel W. DeHayes

Jeffrey A. Hoffer  William C. Perkins
 CHAPTER 1
MANAGING IT IN AN E-WORLD

Information technology (IT) –

computer technology (hardware and software) for
processing and storing information, as well as
communications technology for transmitting information

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 CHAPTER 1
MANAGING IT IN AN E-WORLD
 Managing IT in business today is very different
from managing in a prebrowser world
 Business managers now expect:
 Information on firm’s internal operations
 Data about external market conditions
 Automated personal organizers
 Networks always available
 Applications that are easy to use

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 RECENT INFORMATION
TECHNOLOGY TRENDS

 Hard to predict trends due to rate of

change in IT industry
 Consider several MIS-predictions …

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 MISPREDICTIONS BY IT
INDUSTRY LEADERS
This “telephone” has too many shortcomings to be seriously
considered as a means of communication. The device is inherently
of no value to us.
-Western Union internal memo, 1876

I think there is a world market for maybe five computers.

-Thomas Watson, chairman of IBM, 1943

But what [is a microchip] good for?

-Engineer at the Advanced Computing
Systems Division of IBM, 1968

There is no reason anyone would want a computer in their home.

-Ken Olson, president, chairman, and founder
of Digital Equipment Corp., 1977
640K ought to be enough for anybody.
-Attributed to Bill Gates, chairman of Microsoft, 1981

Dell has a great business model, but that dog won’t scale.
-John Shoemaker, head of Sun’s server division, 2000

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 RECENT INFORMATION
TECHNOLOGY TRENDS
Computer Hardware: Faster, Smaller, Cheaper

 1981: first IBM PC

 1990s: PCs commonplace
 Now ...
 Easy-to-use operating system with graphical interface
 Web browser ready
 Point-and-click technology
 Plays music and videos
 Notebook versions common for business travel

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 RECENT INFORMATION
TECHNOLOGY TRENDS
Computer Software: Standardized and Integrated

 Majority of microcomputers:
 Microsoft Windows – operating system software
 Microsoft Office Suite – productivity software
 Word processing
 Spreadsheet
 Database
 Presentation
 E-mail
 Web browser

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 RECENT INFORMATION
TECHNOLOGY TRENDS
Computer Software: Standardized and Integrated

Enterprise system packages –

software packages with integrated modules that pass
common business transactions across groups, divisions,
and national boundaries in “real time”

 Widely adopted by manufacturing and service firms of all

sizes
 Often tailored to specific industries
 Integrate data across traditional and Web-based channels
for internal use, customers, and suppliers

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 RECENT INFORMATION
TECHNOLOGY TRENDS
Computer Networks: High Bandwidth, Global, and Wireless
 1990s:
 Standards for browser applications and Internet communications
(TCP/IP)
 Fiber-optic lines used by more telecommunications providers
 High-speed access (high-bandwidth lines) available both to
businesses and home owners
 2000:
 Commonplace for company networks linked to the Internet
 2003:
 Home owners using modems to connect to cable lines or digital
subscriber lines (DSL) via telephone lines
 Today:
 More companies investing in wireless technology

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 RECENT INFORMATION
TECHNOLOGY TRENDS
Consider:
 By 2000, more than half of U.S. business capital
expenditures were for IT
 Today, IT can not only enable, but can also help
shape business strategies

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 RECENT INFORMATION
TECHNOLOGY TRENDS
Traditional Ways to Compete

 Three ways to compete (Porter, 1980):

 Cost – by being a low-cost producer of a good or
service
 Differentiation – by offering products or services
customers prefer due to superiority with
innovativeness, image, quality, or customer service
 Focus – competing on cost or differentiation within a
specific market niche

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 RECENT INFORMATION
TECHNOLOGY TRENDS
Traditional Ways to Compete

 IT can help with cost

 Examples:
 Automating transaction time
 Shortening order cycle time
 Providing operational information for decision making

 IT can help with differentiation

 Examples:
 Giving sales personnel information to better serve customers
 Providing just-in-time supplies for customers
 Creating new information-based products

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 RECENT INFORMATION
TECHNOLOGY TRENDS
New Ways to Compete

 Using the Internet

 Examples:
Entire travel industry restructured because of
competition via the Internet
Wal-Mart, Dell, and Lands’ End leverage Internet
to compete
Results: achieve additional cost savings, mass
customize products, and reach even more
customers

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 WORKING IN AN E-WORLD
 Business invests more in IT support for today’s
knowledge workers
 IT infrastructure now must support workers
anytime and anywhere
 Sales force personnel are now telecommuters

Telecommuters –
One who works from a location outside the firm’s regular
offices and “commutes” via telecommunications lines in
order to do his or her work

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 WORKING IN AN E-WORLD
More Productive Teams

 E-mail
 Document sharing
 Software to support collaborative teamwork
 Videoconferencing

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 WORKING IN AN E-WORLD
Virtual Organizations and Free Agents

 Virtual Organizations
 Temporary alliances between organizations and
individuals
 Contracts often gain scarce expertise or cheaper
labor costs
 Some might have no real office; employees can be
located anywhere

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 WORKING IN AN E-WORLD
Virtual Organizations and Free Agents

 Free Agents
 Are telecommuters who do knowledge work without
being at a specific location
 Have specialized skills and IT linkages to work as
independent contractors
 Often post resumes and sell skills globally

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 LIVING IN AN E-WORLD
 Advantages
 Fast,convenient communication with cell phones
 Vast amounts of “free” information via the Internet

 Disadvantages
 Loss of individual privacy
 Vulnerability to computer crimes
 Social inequalities due to lack of access to computers

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 THE IS MANAGEMENT ROLE IN
ORGANIZATIONS
Information systems (IS) organization –
department or unit that has primary responsibility for
managing IT – hardware, software, networks, and IS
professionals

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 THE IS MANAGEMENT ROLE IN
ORGANIZATIONS
Accounting Era IS professionals were Transaction processing
primary decision makers automated with use of
Back-office computer
but reported into an computers for single
automation began with
accounting function functions
accounting
(transactions were
aggregated and then
processed in a single run
or “batch” – magnetic
tape storage)
1950s to mid-1960s

© 2005 Pearson Prentice-Hall Chapter 1 - 20 Figure 1.1 Five IS Management Eras Page 7
 THE IS MANAGEMENT ROLE IN
ORGANIZATIONS
Operational Era Business managers Online systems were
became more involved in introduced for
Computer automation
systems decision making transaction processing
expanded to other
functions (as applications (made possible by direct
supported more business access storage devices
functions) using magnetic disks)

Began mid-1960s

© 2005 Pearson Prentice-Hall Chapter 1 - 21 Figure 1.1 Five IS Management Eras Page 7
 THE IS MANAGEMENT ROLE IN
ORGANIZATIONS
Information Era End users became direct Decision support
users of computer systems that could
IT investments to
applications using user- “interact” with users were
support the knowledge
friendly mainframe and introduced
worker
microcomputer tools
(made possible by
software tools developed
for direct end-user
computing)
Late 1970s – mid 1980s

© 2005 Pearson Prentice-Hall Chapter 1 - 22 Figure 1.1 Five IS Management Eras Page 7
 THE IS MANAGEMENT ROLE IN
ORGANIZATIONS
Network Era Business managers Computer networking
began to take more of an enabled applications with
IT investments in
“ownership” role in IT business partners
interenterprise systems
investments (custom-developed inter-
organizational
applications)

Began mid-1980s

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 THE IS MANAGEMENT ROLE IN
ORGANIZATIONS
Internet Era Top management has The Internet and Web-
taken a leadership role in based applications
IT investments to
IT decision making to provide a global reach to
support new kinds of
ensure that IT customers and business
e-business
investments are partners
strategically aligned with
(enabled by a standard
the business
communication protocol
Began mid-1990s with and standard Web
Web browser browswer)

© 2005 Pearson Prentice-Hall Chapter 1 - 24 Figure 1.1 Five IS Management Eras Page 7
 THE IS MANAGEMENT ROLE IN
ORGANIZATIONS
Managing the IT Assets

© 2005 Pearson Prentice-Hall Chapter 1 - 25 Figure 1.2 Three IT Assets Page 8

Managing the IT Assets

© 2005 Pearson Prentice-Hall Chapter 1 - 26 Figure 1.3 Enterprise IT Architecture Page 9

(Based on Weil and Broadbent, 1998)
 THE IS MANAGEMENT ROLE IN
ORGANIZATIONS
People Roles

 IS Leaders
 Other IS Managers
 IS Professionals
 Business Managers
 End Users

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 THE IS MANAGEMENT ROLE IN
ORGANIZATIONS
People Roles

 IS Leaders
Chief Information Officer (CIO) –
a firm’s high-level general IT asset manager with both
technology and business leadership experience who,
together with the executive management team, plans for
integration of IT for strategic advantage

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 THE IS MANAGEMENT ROLE IN
ORGANIZATIONS
People Roles

 Other IS Managers … accountable for:

 Datacenters
 Network operations
 New applications development

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 THE IS MANAGEMENT ROLE IN
ORGANIZATIONS
People Roles

 IS Professionals … include:
 Programmers
 Software engineers
 Systems analysts
 Database developers
 Web developers
 LAN administrators
 Technical support specialists

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 THE IS MANAGEMENT ROLE IN
ORGANIZATIONS
People Roles

 Business Managers …
 Are internal customers of the IT organization
 Need to be IT-savvy
 May jointly lead strategic IT projects
 Provide other IT-related roles:
 Serve on committees to prioritize and approve IT requests
 Act as sponsor or “owner” of an IT project
 Serve as process or functional expert on project team
 Participate in planning and execution of IT implementation

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 THE IS MANAGEMENT ROLE IN
ORGANIZATIONS
People Roles

 End Users …
 Provide business expertise to project teams
 Participate in redesign of business processes
 Give feedback to prototype screens and reports
during system development
 Help gather customer input when they are directly
affected by IT project

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