only for daisy

FIGURE 2.2 Business pressures, organizational performance and responses, and IT support.

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Market Pressures

Globalization

Changing Nature of the Workforce

Powerful Customers

Globalization: the integration and interdependence of economic, social, cultural, and ecological facets of life, made possible by rapid advances in information technology.

Changing Nature of the Workforce: The workforce, particularly in developed countries, is becoming more diversified. Increasing numbers of women, single parents, minorities, and persons with disabilities are now employed in all types of positions.

Powerful Customers: consumer sophistication and expectations increase as customers become more knowledgeable about the products and services they acquire. Customers can use the Internet to find detailed information about products and services, to compare prices, and to purchase items at electronic auctions.

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Globalization

The integration and interdependence of economic, social, cultural, and ecological facets of life, made possible by rapid advances in IT.

Globalization

The World is Flat, by Thomas Friedman

Technology is leveling global competition making the world “Flat”

Friedman’s Three Eras of Globalization

Globalization 1.0

Globalization 2.0

Globalization 3.0

Thomas Friedman --> Three eras of globalization:

Globalization 1.0:

Timeframe: 1492 to 1800

Distinct Focus: Countries

Driver: Brute Force, Braun

Globalization 2.0:

Timeframe: 1800 to 2000

Distinct Focus: International Companies

Driver:

-- first half of this period --> Falling Transportation Costs (Steam Engine/Railroads)

-- second half of this period --> Falling Telecommunication Costs (Telegraph, Telephone, Computer, Satellite, Fiber Optics, Internet)

Globalization 3.0:

Timeframe: 2000 to Present

Distinct Focus: Groups and Individuals

Driver: Convergence of 10 forces (or Flatteners)

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Globalization 1.0 (1st Era)

1492 - 1800

Focus:

Countries

Drivers:

Muscle

Horse power

Wind power

Steam power

Thomas Friedman --> Three eras of globalization:

Globalization 1.0:

Timeframe: 1492 to 1800

Distinct Focus: Countries

Driver: Brute Force, Braun

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Globalization 2.0 (2nd Era) 1800 - 2000

Focus:

Companies

Main Driver:

Multinational Companies

First Half of 2.0

Driver: Falling transport costs

Second Half of 2.0

Driver: Falling telecom costs

Thomas Friedman --> Three eras of globalization:

Globalization 2.0:

Timeframe: 1800 to 2000

Distinct Focus: International Companies

Driver:

-- first half of this period --> Falling Transportation Costs (Steam Engine/Railroads)

-- second half of this period --> Falling Telecommunication Costs (Telegraph, Telephone, Computer, Satellite, Fiber Optics, Internet)

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Globalization 3.0 (3rd Era)

2000 - Present

Focus:

Groups & Individuals

Drivers:

Convergence of 10 forces or “Flatteners”

Thomas Friedman --> Three eras of globalization:

Globalization 3.0:

Timeframe: 2000 to Present

Distinct Focus: Groups and Individuals

Driver: Convergence of 10 forces (or Flatteners)

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The Ten “Flatteners”

Outsourcing

Offshoring

Supply Chaining

Insourcing

Informing

The Steriods

11/9/1989: Berlin Wall Falls

8/9/1995: Netscape Goes Public

Development of Workflow Software

Uploading

Fall of the Berlin Wall on November 9, 1989:

Shifted the world toward free-market economies and away from centrally planned economies.

Led to the emergence of the European Union and early thinking about the world as a single, global market.

Netscape goes public on August 9, 1995:

Popularized the Internet and the World Wide Web.

Development of workflow software:

Enabled computer applications to work with one another without human intervention.

Enabled faster, closer collaboration and coordination among employees, regardless of their location.

Uploading:

Empowered all Internet users to create content and put it on the Web.

Led the transition from a passive approach to content to an active, participatory, collaborative approach.

Outsourcing:

Contracting with an outside company to perform a specifi c function that your company was doing itself and then integrating their work back into your operation; for example, moving customer call centers to India.

Offshoring:

Relocating an entire operation, or certain tasks, to another country; for example, moving an entire manufacturing operation to China.

Supply chaining:

Technological revolution led to the creation of networks composed of companies, their suppliers, and their customers, all of which could collaborate and share information for increased efficiency.

Insourcing:

Delegating operations or jobs within a business to another company that specializes in those operations; for example, Dell hires FedEx to “take over” Dell’s logistics process.

Informing:

The ability to search for information, best illustrated by search engines.

The Steroids (computing, instant messaging and fi le sharing, wireless technologies, Voice over Internet Protocol, videoconferencing, and computer graphics):

Technologies that amplify the other flatteners.

Enable all forms of computing and collaboration to be digital, mobile, and personal.

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Changing Nature of the Workforce

Workforce is Becoming More Diversified

Women

Single Parents

Minorities

Persons with Disabilities

IT is Enabling Telecommuting Employees

Powerful Customers

Increasing consumer sophistication & expectations

Consumer more knowledgeable about

Products and services

Price comparisons

Electronic auctions

Customer Relationship Management

Technology Pressures

Technological Innovation & Obsolescence

Rapid development of both New and Substitute Products & Services

Information Overload

Vast stores of data, information, & knowledge

Difficulties in managing data for decision making

Technological Innovation and Obsolescence: Few and improved technologies rapidly create or support substitutes for products, alternative service options, and superb quality. As a result, today’s state-of-the-art products may be obsolete tomorrow.

Information Overload: Internet and other telecommunications networks are bringing a flood of information to managers. To make decisions effectively and efficiently, managers must be able to access, navigate, and utilize these vast stores of data, information, and knowledge.

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Societal / Political / Legal Pressures

Social Responsibility

Compliance with Government Regulations

Protection against Terrorist Attacks

Ethical Issues

Social Responsibility: Social issues that affect businesses and individuals range from the state of the physical environment, to company and individual philanthropy, to education. Some corporations and individuals are willing to spend time and/or money to address various social problems. These efforts are known as organizational social responsibility or individual social responsibility.

Compliance with Government Regulations: government regulations regarding health, safety, environmental protection, and equal opportunity. Businesses tend to view government regulations as expensive constraints on their activities. In general, government deregulation intensifies competition. In the wake of 9/11 and numerous corporate scandals, the U.S. government passed many new laws, including the Sarbanes–Oxley Act, the USA PATRIOT Act, the Gramm–Leach–Bliley Act, and the Health Insurance Portability and Accountability Act (HIPAA).

Protection Against Terrorist Attacks: Since September 11, 2001, organizations have been under increased pressure to protect themselves against terrorist attacks. In addition, employees who are in the military reserves have been called up for active duty, creating personnel problems. Information technology can help protect businesses by providing security systems and possibly identifying patterns of behavior associated with terrorist activities, including cyberattacks.

Ethical Issues: Ethics relates to general standards of right and wrong. Information ethics relates specifically to standards of right and wrong in information processing practices. Ethical issues are very important because, if handled poorly, they can damage an organization’s image and destroy its employees’ morale.

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Social Responsibility

Green IT

Facilities design and management

Carbon management

International and U.S. state environmental laws

Energy management

Digital Divide

One Laptop per Child (OLPC) http://one.laptop.org

IT is instrumental in organizational efforts to “go green” in three areas:

Facilities design and management

Carbon management

International and U.S. environmental laws

Digital Divide: refers to the wide gap between those individuals who have access to information and communications technology and those who do not.

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Solar-Powered Tablets in Ethiopia

2.3

[about business]

What advantages could result from increasing the literacy of 100 million children around the world? Be specific.

In this experiment, the tablets were not connected to the Internet. Discuss the advantages and disadvantages to the children if the tablets were connected.

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Social Responsibility & Philanthropy in Business

www.patientslikeme.com

www.giftflow.org

www.ourgoods.org

www.sparked.com

www.thredup.com

www.collaborativeconsumption.com

www.kiva.org

www.donorschooce.org

Compliance with Government Regulations

Sarbanes-Oxley Act

USA PATRIOT act

Gramm-Leach-Bliley Act

Health Insurance Portability & Accountability Act (HIPAA)

Protection against Terrorist Attacks

Employees in military reserves called to active duty

Information Technology used to identify and protect against terrorists and cyberattacks

Department of Homeland Security’s (DHS) US-VISIT program

Network of biometric-screening systems

Ethical Issues

General standards of right and wrong

Information-processing activities

Monitoring employee email

Monitoring employee Internet activity at work

Privacy of customer data

Organizational Responses

Strategic Systems

Customer Focus

Make-to-Order and Mass Customization

Bodymetrics (www.bodymetrics.com)

E-Business & E-Commerce

Strategic Systems: provide organizations with advantages that enable them to increase their market share and/or profits, to better negotiate with suppliers, and to prevent competitors from entering their markets.

Customer Focus: Organizational attempts to provide superb customer service can make the difference between attracting and retaining customers versus losing them to competitors. Numerous IT tools and business processes have been designed to keep customers happy.

Make-to-Order: a strategy of producing customized (made to individual specifications) products and services.

Mass Customization: a company produces a large quantity of items, but it customizes them to match the needs and preferences of individual customers. Mass customization is essentially an attempt to perform make-to-order on a large scale (Example: Bodymetrics <www.bodymetrics.com>).

E-Business and E-Commerce: Conducting business electronically is an essential strategy for companies that are competing in today’s business environment.

Electronic commerce (EC or e-commerce): describes the process of buying, selling, transferring, or exchanging products, services, or information via computer networks, including the Internet.

E-business: a somewhat broader concept than EC that includes servicing customers, collaborating with business partners, and performing electronic transactions within an organization.

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The Weather Channel

2.4

[about business]

Identify several reasons (not discussed in the case) why accurate weather predictions are so important. Can an accurate weather prediction be considered a competitive advantage for an organization that receives this information? Why or why not? Support your answer with specific examples.

Will Dark Sky, Sky Motion, and WeatherSphere enjoy a lasting competitive advantage over The Weather Channel? Why or why not? Support your answer.

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Competitive Advantage and Strategic Information Systems

2.4

Porter’s Competitive Forces Model

Porter’s Value Chain Model

Strategies for Competitive Advantage

Competitive Advantage: any assets that provide an organization with an edge against its competitors in some measure such as cost, quality, or speed. It also helps an organization to control a market and to accrue larger-than-average profits.

Business Environment: the combination of social, legal, economic, physical, and political factors in which businesses conduct their operations. Significant changes in any of these factors are likely to create Business Pressures on organizations.

Organizations Responses: Organizations respond to the various pressures by implementing Information Technology (IT) such as strategic systems, customer focus, make-to-order and mass customization, and e-business.

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Competitive Advantage and Strategic Information Systems

2.4

Competitive Strategy

A statement identifying a business’s approach to compete, it’s goals, and the plans and policies required to attain those goals.

Competitive Advantage and Strategic Information Systems

2.4

Strategic Information Systems (SIS)

An information system that helps an organization achieve and maintain a competitive advantages

Porter’s Competitive Forces Model

Threat of Entry of New Competitors

Bargaining Power of Suppliers

Bargaining Power of Customers/Buyers

Threat of Substitute Products or Services

Rivalry Among Existing Firms within the Industry

Threat of Entry of New Competitors: The threat that new competitors will enter your market is high when entry is easy and low when there are significant barriers to entry.

Bargaining Power of Suppliers: Supplier power is high when buyers have few choices from whom to buy and low when buyers have many choices.

Bargaining Power of Customers (Buyers): Buyer power is high when buyers have many choices from whom to buy and low when buyers have few choices.

Threat of Substitute Products or Services: If there are many alternatives to an organization’s products or services, then the threat of substitutes is high. If there are few alternatives, then the threat is low.

Rivalry Among Existing Firms: The threat from rivalry is high when there is intense competition among many firms in an industry. The threat is low when the competition is among fewer firms and is not as intense.

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Barrier to Entry: a product or service feature that customers have learned to expect from organizations in a certain industry. A competing organization must offer this feature in order to survive in the marketplace (e.g., legal requirements such as admission to the bar to practice law).

Switching Costs: the costs, in money and time, imposed by a decision to buy elsewhere (e.g., contracts with smartphone providers).

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Porter’s Competitive Forces Model