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IT Supports Organizational
Performance in Turbulent
Environments
Define IS and IT
Chapter 1 2
Learning Objectives (Continued)
Chapter 1 3
Digital Economy – “New” Economy
E-Business: The use of electronic technologies to
transact business
Chapter 1 4
Digital Economy
Chapter 1 5
Digital Business
Chapter 1 6
The Old Economy – Taking Photo’s
1. Buy film in a store
2. Load your camera
3. Take pictures
4. Take roll of film to store for processing
5. Pickup the film when ready
6. Select specific photos for enlargement
7. Mail to family and friends
Chapter 1 7
The New Economy – Taking Photo’s
1st Generation Digital Photography
Old economy (except 6 and 7) were replaced by
using a scanner and emailing
Chapter 1 8
Major IT Characteristics in the Digital
Economy
Globalization
Digital systems
Speed (need for real-time transactions)
Information overload
Markets moving on-line
Digitization
Innovation
New business models
High rate of obsolescence
New opportunities
New types of fraud and crimes
Wars are going cyber
Digitized organizations
Chapter 1 9
Doing Business in the Digital
Economy
The digital economy is an economy based on digital
technologies, including communication networks (the
Internet, intranets, and extranets), computers, software,
and other related technologies
Chapter 1 10
The Global Platform of the New
Economy
A huge number of digitizable products; that is products
that can be converted to digital format. Most common
are: books, movies, magazines, TV and radio
programming, electronic games, music CDs, and
computer software.
Chapter 1 11
Electronic Business
Chapter 1 12
New Economy vs. Old Economy
Paying for goods Visit store, select item, pay, go Use self-service kiosks
Supplying commercial photos Use newspapers, paper, Use hub-like supply chain with
catalog, or online digitized picture
Chapter 1 13
Business Models
Chapter 1 14
Business Models
Chapter 1 15
Digital Age Business Models
Name-Your-Own Price
Reverse Auctions
Affiliate Marketing
E-Marketplaces and Exchanges
Electronic aggregation (buying groups)
Chapter 1 16
Drivers Forcing Changes In Business
Models
Business Pressures
Environmental, organizational, and technological
factors
Society
Market
Technology
Chapter 1 18
Business Pressures, Organizational
Responses, and IT Support
Business Pressure - The business environment is the
combination of social, legal, economic, physical, and
political factors that affect business activities
Chapter 1 19
Three Types of Business Pressures
Market Pressures:
Powerful Customers
Chapter 1 20
Business Pressures (Continued)
Technology Pressures:
Information Overload
Chapter 1 21
Business Pressures (Continued)
Societal Pressures:
Social Responsibility
Ethical Issues
Chapter 1 22
Organizational Responses
Chapter 1 23
Organizational Responses (Continued)
Make-to-Order is a strategy of producing customized
products and services
Chapter 1 24
Information System
An information system (IS) collects, processes, stores,
analyzes, and disseminates information for a specific purpose.
Like any other system, an information system includes inputs
(data, instructions) and outputs (reports, calculations). It
processes the inputs by using technology such as PCs and
produces outputs that are sent to users or to other systems via
electronic networks and a feedback mechanism that controls
the operation.
Chapter 1 25
Information System Is A System
Chapter 1 26
Computer Based Information System
Hardware
Software Hardware
Data Software
Network Application
Data
People
Procedures
People
Chapter 1 29
Strategies of competitive advantage
Porter:
Cost leadership
Differentiation
Niche market
Other strategies
Growth
Alliance
Innovation
Operational effectiveness
Customer orientation
Entry barriers
Lock in customers or suppliers
Increase switching costs
Chapter 1 30
Porter’s Value Chain
Chapter 1 31
Managerial Issues
Globalization. Chapter 1 32
Managerial Issues (Continued)
Chapter 1 33
Chapter 1
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from the use of the information contained herein.
Chapter 1 34