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:
Windows – operating system software
 Microsoft Office Suite – productivity software
 Microsoft
 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):
– 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
 Cost
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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
Back-office computer
automation began with
accounting
IS professionals were
primary decision makers
but reported into an
accounting function
(transactions were
aggregated and then
processed in a single run
or “batch” – magnetic
tape storage)
1950s to mid-1960s
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Transaction processing
automated with use of
computers for single
functions
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Figure 1.1 Five IS Management Eras
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THE IS MANAGEMENT ROLE IN
ORGANIZATIONS
Operational Era
Computer automation
expanded to other
functions
Business managers
Online systems were
became more involved in introduced for
systems decision making transaction processing
(as applications
supported more
business functions)
(made possible by direct
access storage devices
using magnetic disks)
Began mid-1960s
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Figure 1.1 Five IS Management Eras
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THE IS MANAGEMENT ROLE IN
ORGANIZATIONS
Information Era
IT investments to
support the knowledge
worker
End users became direct
users of computer
applications using userfriendly mainframe and
microcomputer tools
Decision support
systems that could
“interact” with users were
introduced
(made possible by
software tools developed
for direct end-user
computing)
Late 1970s – mid 1980s
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Figure 1.1 Five IS Management Eras
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THE IS MANAGEMENT ROLE IN
ORGANIZATIONS
Network Era
IT investments in
interenterprise systems
Business managers
began to take more of an
“ownership” role in IT
investments
Computer networking
enabled applications with
business partners
(custom-developed interorganizational
applications)
Began mid-1980s
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Figure 1.1 Five IS Management Eras
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THE IS MANAGEMENT ROLE IN
ORGANIZATIONS
Internet Era
IT investments to
support new kinds of
e-business
Top management has
taken a leadership role in
IT decision making to
ensure that IT
investments are
strategically aligned with
the business
Began mid-1990s with
Web browser
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The Internet and Webbased applications
provide a global reach to
customers and business
partners
(enabled by a standard
communication protocol
and standard Web
browswer)
Figure 1.1 Five IS Management Eras
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THE IS MANAGEMENT ROLE IN
ORGANIZATIONS
Managing the IT Assets
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Figure 1.2 Three IT Assets
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Managing the IT Assets
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Figure 1.3 Enterprise IT Architecture
(Based on Weil and Broadbent, 1998)
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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:
 Data
centers
 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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