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

2005 Pearson Prentice-Hall

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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 firms internal operations

Data about external market conditions
Automated personal organizers
Networks always available
Applications that are easy to use

2005 Pearson Prentice-Hall

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RECENT INFORMATION
TECHNOLOGY TRENDS
Hard to predict trends due to rate of
change in IT industry
Consider several mis-predictions

2005 Pearson Prentice-Hall

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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 wont scale.
-John Shoemaker, head of Suns server division, 2000

2005 Pearson Prentice-Hall

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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
2005 Pearson Prentice-Hall

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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

2005 Pearson Prentice-Hall

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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

2005 Pearson Prentice-Hall

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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

2005 Pearson Prentice-Hall

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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

2005 Pearson Prentice-Hall

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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
2005 Pearson Prentice-Hall

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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
2005 Pearson Prentice-Hall

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WORKING IN AN E-WORLD
Business invests more in IT support for todays
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 firms regular
offices and commutes via telecommunications lines in
order to do his or her work
2005 Pearson Prentice-Hall

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WORKING IN AN E-WORLD
More Productive Teams

E-mail
Document sharing
Software to support collaborative teamwork
Videoconferencing

2005 Pearson Prentice-Hall

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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

2005 Pearson Prentice-Hall

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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

2005 Pearson Prentice-Hall

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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

2005 Pearson Prentice-Hall

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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

2005 Pearson Prentice-Hall

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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

1950s to mid-1960s

2005 Pearson Prentice-Hall

Transaction processing
automated with use of
computers for single
functions
(transactions were
aggregated and then
processed in a single run
or batch magnetic
tape storage)

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
(made possible by direct
supported more business access storage devices
functions)
using magnetic disks)

Began mid-1960s

2005 Pearson Prentice-Hall

Figure 1.1 Five IS Management Eras

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THE IS MANAGEMENT ROLE IN

ORGANIZATIONS

End users became direct

users of computer
IT investments to support applications using userthe knowledge worker
friendly mainframe and
microcomputer tools

Information Era

Late 1970s mid 1980s

2005 Pearson Prentice-Hall

Decision support
systems that could
interact with users were
introduced
(made possible by
software tools developed
for direct end-user
computing)

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

2005 Pearson Prentice-Hall

Figure 1.1 Five IS Management Eras

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THE IS MANAGEMENT ROLE IN

ORGANIZATIONS

Top management has

taken a leadership role in
IT investments to support IT decision making to
new kinds of eensure that IT
business
investments are
strategically aligned with
the business

Internet Era

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

O
RGANIZATIONS
Managing the IT Assets

2005 Pearson Prentice-Hall

Figure 1.2 Three IT Assets

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Managing the IT Assets

2005 Pearson Prentice-Hall

Figure 1.3 Enterprise IT Architecture

(Based on Weil and Broadbent, 1998)

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THE IS MANAGEMENT ROLE IN

O
RGANIZATIONS
People Roles
IS Leaders
Other IS Managers
IS Professionals
Business Managers
End Users

2005 Pearson Prentice-Hall

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THE IS MANAGEMENT ROLE IN

O
RGANIZATIONS
People Roles
IS Leaders

Chief Information Officer (CIO)

a firms 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

O
RGANIZATIONS
People Roles

Other IS Managers accountable for:

Data

centers
Network operations
New applications development

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THE IS MANAGEMENT ROLE IN

O
RGANIZATIONS
People Roles

IS Professionals include:
Programmers
Software

engineers
Systems analysts
Database developers
Web developers
LAN administrators
Technical support specialists

2005 Pearson Prentice-Hall

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THE IS MANAGEMENT ROLE IN

O
RGANIZATIONS
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

2005 Pearson Prentice-Hall

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THE IS MANAGEMENT ROLE IN

O
RGANIZATIONS
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

2005 Pearson Prentice-Hall

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