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Information Technology in the Digital Economy

1: Informatics Class 2

2: Class objectives 1 Describe the characteristics of the digital economy and e-business. 2 Recognize the relationships between business pressures, organizational responses, and information systems. 3 Identify the major pressures in the business environment and describe the major organizational responses to them. 4 Define computer-based information systems and information technology. 5 Describe the role of information technology in supporting the functional areas, public services and specific industries 6 List the new technology development in the areas of generic and networked computing and Web-based systems. 7 Understand the importance of learning about information technology.

3: Digital Economy – New Economy E-Business: The use of electronic technologies to transact business. Collaboration: People and Organizations interact, communicate, collaborate and search for information Information Exchange: Storing, processing and transmission of information.

4: Technological trends of global IT market - the 3rd Platform concept

5: Digital Business

6: The Old Economy – Taking Photos Buy film in a store Load your camera Take pictures Take roll of film to store for processing Pickup the film when ready Select specific photos for enlargement Mail to family and friends

7: The New Economy – Taking Photos 1st Generation Digital Photography Old economy except 6 and 7 were replaced by using a scanner and emailing 2nd Generation Digital Photography Use a Digital Camera, no film, no processing. 3rd Generation Digital Photography Your Digital Camera is now your mobile phone, in your binoculars or a palmtop computer.

8: Business Models A business model is a method of doing business by which a company can generate revenue to sustain itself. The model spells out how the company adds value to create a product or service. (Value- add Chain model ) Apple makes and sells smart phones A TV station provides free broadcasting. Its survival depends on a complex model involving advertisers and content providers. Internet portals, such as Yandex, use a complex business model.

9: Digital Age Business Models Name-Your-Own Price Reverse Auctions Affiliate Marketing E-Marketplaces and Exchanges Electronic aggregation (buying groups)

10: Drivers Forcing Changes In Business Models Environmental, organizational, and technological factors are creating a highly competitive business environment ; these factors or forces can change quickly, sometimes in an unpredictable manner. Therefore, companies need to react frequently and quickly to both the threats and the opportunities resulting from this new business environment. A response can be a reaction to a pressure already in existence, an initiative intended to defend an organization against future pressures, or an activity that exploits an opportunity created by changing conditions.

11: The Drivers of change Business Pressures on an Organization that force change.

12: The Drivers of change Continued Business Pressures on an Organization.

13: Organizational Response to these Drivers Strategic Systems Continuous Improvement – Operational Efficiency Restructuring business processes Manufacturer to order Customer Focus Strategy Employ E-business tools Business Alliances

14: 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.

15: Information System as a sequence of processes

16: Computer Based Information System Hardware Software Data Network Procedures People

17: Applications and Operations Retail operations Wholesale Manufacturing Human Resources Marketing Content management …

18: Information Systems Functional Perspective Marketing Identify customers Determine what they want Planning products Advertising and promoting products Determine prices for products

19: Information Systems Functional Perspective Sales Contact customers Sell the product Take the order Follow-up on the sale 1-2 year sales forecast

20: Information Systems Functional Perspective Manufacturing Control Equipment and machinery Design new products Quantity of components to produce New production facilities Generate the work order

21: Information Systems Functional Perspective Purchasing ( procurement) Which vendors Quantity to purchase Rebate tracking Handle delivery mismatches Generate the purchase order

22: Information Systems Functional Perspective Finance Financial Assets Investment management Banking Long term budgets

23: Information Systems Functional Perspective Accounting Accounts Receivable Disbursements Payroll Depreciation Earned Rebates …

24: Information Systems Functional Perspective Human Resources Employee wages, salaries & benefits Long term labor requirements Tracking vacation, sick, Track employee skills Interviewing employees

25: Trends in Technology Cost-performance ratio of chips keeps improving. Moores Law, his prediction was that the processing power of silicon chips would double every 18 months. According to McGarvey & tenornetworks. com, states that the performance of optical communication networks is growing by a factor of 10 every three years Several new devices and methods to increase storage capacity price performance Object technology enables the development of self-contained units of software that can be shared Networked and distributed computing is emerging rapidly Metcalfes Law.

26: Trends in Technology Internet Mobile Computing and M-Commerce Wireless networks Ubiquitous Computing Smart Devices

27: Trends in Moblie technology

28: Trends in Technology (continued) The Network Computer Optical Networks Storage Area Networks Intranets & Extranets The Internet

29: Why Study Information Technology ? You will be more effective in your chosen career if you understand how successful information systems are built, used, and managed. You also will be more effective if you know how to recognize and avoid unsuccessful systems and failures. Developing Computer Literacy will only enhance your Information Literacy

30: The Outline

31: MANAGERIAL ISSUES

32: MANAGERIAL ISSUES Continued

33: Questions ?

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