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MIS 513 Chapter 1 Strategic Use of Information Technology in the Digital Economy

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List key points of Seimens AG case study p. 2
. Transformed into e-business

. German based company

. 150 year

. diversified/globalized

. 484,000 employees

. Used SAP R/3 sytstem with
i2 technology and IBM

.2000 online sales 10% of sales
. new systems link the enterprise, insure support fiunction connect with supply chain partners using internet when possible

. 2004 most employess
networked throughtout
company
What lessons were learned from Siemons transforming into an ebussiness? p. 2.
1. Fierce global competition can drive even large corporation to redefine themselves.
2. The internet allows a useful opportunity to retool and partner allowing large companies effective ways to expand sales.
Siemens AG used web systems to: p. 2.
increase their competitive advantage by:
. reducing costs
. increasing productivitiy
. improve customer service
Chapter 1 focuses on:
presenting characteristics and concepts of the digital economy and how it is changing business processes.
Chapter 1 abbreviations:
EC - electronic commerce or e-commerce.
VANs - private value added networks
ACC - accounting, POM - production operations mgt, MKT - marketing, HRM- Human Resource management, FIN - fincance, Gov - goverment, SVS - other public service and servidcce industires.
Define network computing and list characteristics.
connects computers and other electronic devices via telecommunication devices.
Define Internet or global networked environment
Multiple location networked computer can be connecteded to internet or to its organizational counterpart - intranet.
Define Information technology
Broadly is the collection of computing systems used by an organization.
What does digital economy refer to:

()sometimes refered to as internet economy, new economy, web economy) p. 4
It refers to an economy that is based on digital technologies including
.digital communication network
.intranet
.internet
.private value added networks (VANs)
What are some major capabilities of Information systems?
. high speed, high volume, numerical computations
. fast/accurate
. large amounts of data - easy access
. quick inexpensive access
. enable communications and
collaberation any time /
any where
Case Study: Thaigem.com Diamondas are forever p. 6.

List key aspects of:
. 24 x 7 online access

. focus on customer
satisfaction
Example 1: Paying for Goods: The Checkout Experience p. 7.

What features does new economy provide?
- RFID - radio frequency identification

. tracking
. automatic readability
. reliablility
- ethical issues - people tracking

- Debit card payment
. face or finger print
authentication
Example 2 - Crossing International Borders

List examples of new economic advantages
. passport scanned
. photo taken at same time
. computer authentication
(face ==> id) (10 seconds
to complete transaction)

Australia started using 2003
example 4 Supplying Commercial Photos for ORBIS corporation

List advantages of new economy
Takes advantage of hub system vs linear

. retailer searches and
selects advertizing from
online database.

. client approval sought
through email attachment
and recorded on data
base.
Example 5 - Improving laundry experience for college students.

List advantages of new economy
. dryers and washer hooked to
web.
. web scheduling, tracking,
payment using student id.
. student id serves a debit
card.
. email received when laundry
done.
. system automatically injects
laundry detergent and fabric
softner.
Example 6 - Power of e-commerce

List advantages of new economy:
. economics of scale/presence
. increased competition can help bid prices up for seller. ex. Warren Buffet meeting tickets value $30k per person auctioned on web for 200k per.

Chris MoneyMaker online poker player learned online w/ fast gamres and just as real $.
List the 5 business models in the digital economy.
1. name your own price
2. tendering via reverse
auction.
3. affiliate marketing ex.
banner on web pages.
4. group purchasing
5. e-market places & exchange
Define vertical market places.
Market place that concentrateson one industry.
Define tendering via reverse auction. p. 11
1. First place RFQ - request
for quote.
2. lowest bid wins. (if price
is only consideration)
3. online save time, money,
location.

Note: Governmetns are starting to require reverse auctions.
List 3 business pressures
1. Need for real time
operations. (Decisions
need to be made quickly)
2. changing nature of work
force (more diversified,
more women, more single
parents, ==> diabled
workers older workers.
3. Powerful customers -
sophisticate with
increased expectaions
List 2 technology Pressures:
1. Technological Innovations
and obsolescence.

2. Information overload
List 5 societal pressures
1. Social resonsibility.
2. Government regulation and
deregulation
3. Terrosist atacks &
protection
4. Homeland security.
5. ethical issues
List 7 categories of Organizations major responses.
1. strategic managements &
systems.
2. customer focus
3. continuous improvement
4. restructuring
5. make to order
6. mass customization
7. bussiness alliance
How can strategic management systems help with organization pressure
1. The internet offers
compares strategic
opportunities.
2. Strategic plans can be
broken down into tactial
and operational plans.
3. Strategic plans can help increase market share increase profit increas negotiations with suppliers.
How can bussiness alliances reduce organizational pressure.
Sometime alliance with a competiter can help with positive laws as a whole.

. A collaborative portal is
an opportunity ie.
elecronic transmissions of
pictures.
Define Information Systems (IS)

p. 20
Collects, processes, stores, annalyzes and disseminates information for a specific purpose.
What is an example of a formal Information System.
(format systems includeagreed upon procedures, standard inputs and outputs and fixed definitions)

example: Accounting System
What is an example of a computer based Inforamtaion system (CBIS)
Information system that uses computer technology to perform some or all of its intended
List 6 components of a computer based information system.
. hardware
. software
. database
. network
. procedures
. people
What is the difference between computers and Information systems p. 21
An Information System requires
much more than computers.
What is Information technology
It is the technology side of an info system.
Define critical response activities p. 12.
Boyette& Boyette 1995 maintain that in order to succeed in a dynamic world must take traditional actions such as lowering costs and innovative actions such as changing process or structures or devise a competitive strategy.
Define Metcalfes law. p.29
Rober Metacalfe, a pioneer of computer networks, claimed that the valueof a netowrk grows roughly in line with the square of the number of its users (or nodes) thus if you increas the number of users, say from 2 to 10, the networks;s valuew will change from 2 square (4) to 10 square (100) ro 25 times more.
Define Moore's law p.27
Gordon Moore 1965 - his prediction was the procession power of silicon chips would double every 18 months.
Define Kelly's Extension of Metcalfe's law p. 29
Claimed the value of the internet is actually much larger. Ther reason is Metcalfe's n square is bsed on the idea of the telephone network where the connections are point to point. On the internet we can make multiple simultanewous connections between groups of people.

So, coaims Kelly, the potential value of the Inernet is n to the nth which is obviously a much larger number.
Define Netowrk storage device.
p. 32.
Storage devices that ared attached to the corporate network (usually internets) and that can be accessed from network applicaitons throughout the enterprise for data sharing.
Define Object technology:
Technology that enable development of self contained units of software that can be sheared purchased and or reused. include object-oriented programming, object oriented databases, and other object oriented based components and activities.

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