Midterm Review. Chapter 1. IS Management Overview.
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Transcript of Midterm Review. Chapter 1. IS Management Overview.
The Internet Economy
From APARTNET to today’s Internet WWW has evolved from a graphical layer of the
Internet to a cyberspace for business eRetailers, eMarkets, eAggregators, Informediaries,
Exchanges, Portals
Dot-com crash Pure Internet economy VS. the hybrid model
Business Ecosystems
An ecosystem is a web of relationships surrounding one or a few companies They appear to follow biological rules Various players in one's business ecosystem
Suppliers, distributors, retailers, competitors, banks, advertising agencies etc.
From Supply-Push to Demand-Pull Supply-push
Companies did their best to figure out what customers wanted
Organized to build a supply of products or services and then ‘push’ them out to end customers on stores shelves, in catalogs etc.
Demand-pull Allows much closer and ‘one-to-one’ contact between
customer and seller Offer customers the components of a product/service
then the customer creates their own version by ‘pulling’ what they want
Outsourcing and Strategic Alliances To become more competitive, organizations
are examining types of work that should be done internally or externally by others The thinking is: We should focus on what we do
best and outsource the other functions to people who specialize in them
Ranges from a simple contract for services to a long-term strategic alliance
Demise of Hierarchy
Hierarchical structures cannot cope with rapid change Communications up and down the chain of
command takes too much time for today’s environment
Self-managed groups produce higher performance IT enables team-based organizational structures
by facilitating rapid and far-flung communication
The Mission of Information Systems Early days: "paperwork factories" to pay
employees, bill customers, ship products etc.
MIS era: producing reports all levels of management “Get the right information to the right person at the
right time.”
Today: Improve the performance of people in organizations through the use of information technology.
Waves of Innovation
Source: Kenneth Primozic, Edward Primozic, and Joe Leben, Strategic Choices: supremacy, Survival, or Sayonara (New York: McGraw-Hill, 1991)
Traditional Functions Are Being Nibbled Away (1) The traditional set of responsibilities for IS :
Managing operations of data centers, remote systems, and networks
Managing corporate data Performing systems analysis and design, and
constructing new systems Systems planning Identifying opportunities for new systems
Traditional Functions Are Being Nibbled Away (2)
Distributed systemsEver more knowledgeable usersBetter application packagesOutsourcing
Four Aspects of the CIO Role
Leading Creating a vision by understanding the business
Governing Establishing an IS Governance structure
Investing Shaping the IT portfolio
Managing Establishing credibility and fostering change
Leading: Creating a Vision by Understanding the Business Seven approaches to understanding the
business and its environment: Encourage project teams to study the marketplace Concentrate on lines of business Sponsor weekly briefings Attend industry meetings with line executives Read industry publications Hold informal listening sessions Partner with a line executive
Investing: Shaping the IT Portfolio IT investments has gained increased attention
CIOs were usually falsely blamed for making poor IT investment
Two key IT investment topics What to invest in (strategic) How to make investment decision (tactical)
IT portfolio management Systematic management of large classes of planned
IT initiatives, projects, and ongoing IT services etc.
Strategic Use of Information Systems "Working inward"
Improving a firm's internal processes and structure "Working outward"
Improving the firm's products and relationships with customers "Working across"
Improving its processes and relationships with its business partners
Whither the Internet Revolution? British Railway Revolution – the mania started in
1830s and experienced a crash in 1845 10 fold increase in 1910, 65 years after the crash
During boom, great excitement and small companies flourished
After crash, glamour gone, business became serious and full of hard work
Industry became orderly and profits began to reflect real returns
Investment frenzy for connection technology: "race for space"
Does IT Still Matter?
"IT Doesn't Matter" – article by Nicholas Carr in Harvard Business Review May 2003
What makes a resource truly strategic is not ubiquity but scarcity As information technology's power and ubiquity have
grown, its strategic importance has diminished. Being now available and affordable to all, IT has
evolved from potentially strategic resources into commodity factors of production.
Jumping to a New Experience Curve (1) Strategically using IT to work outward is
highly competitive and innovative Technology updates occur frequently, forming a
set of connected experience curves Each curve represents a new technology or
combination thereof in a product or service as well as in its manufacture and/or support
Moving to a new curve requires substantial investment in a new technology
Establishing Close and Tight Relationships (2) 3 level of systems integration between
companies Loose: provide ad hoc access to internal information
Business processes remain distinct Close: two parties exchange information in a formal
manner Processes are distinct, but some tasks are handled jointly
Tight: two parties share at least one business process High volumes of possibly confidential data are exchanged
Tradition Strategy Making
Assumptions: The future can be
predicted Time is available to
do these 3 parts IS supports and
follows the business Top management
knows best (broadest view of firm)
Company: like an "Army"
Business Strategy
•Business decision•Objectives and direction•Change
System Strategy
•Business-based•Demand-oriented•Application-focused
IT Strategy
•Activity-based•Supply-oriented•Technology-focused
Supportsbusiness
DirectionFor IS
Infrastructure and services
Needs and priorities
Step 1Where is the business going and why?
Step 2What is required?
Step 3How can it be delivered?
Today's Sense-and-Response Approach (1)
Let strategies unfold rather than plan them: A sense-and-respond
approach when predictions are risky Sense a new opportunity
and immediately respond by testing it
Myriad of small experiments
Time
TimeStrategic envelop
Old-era strategyOne big choice, long commitment
New-era strategyMany small choices, short commitments
Stages of Growth
Richard Nolan et al observed four stages in the introduction and assimilations of a new technology Early Successes
Increased interest and experimentation Contagion
Interest grows rapidly; growth is uncontrolled; learning period for the field
Control Efforts begun toward cost reduction and standardization
Integration Dominant design mastered; setting the stage for newer
technology
Five Forces Analysis of the Internet The Internet tends to dampen the profitability of
industries Increases the bargaining power of buyers Decreases barriers to entry Increases the bargaining power of suppliers Increases the threat of substitute products and
services Intensifies rivalry among competitors
Success depends on offering distinct value Firms should focus on their strategic position in an
industry and how they will maintain profitability
Definition: IT Architecture VS. IT
Infrastructure An IT architecture is a blueprint showing how the parts will interact and interrelate. System, information, departments... Multiplicity of structures and views
An IT infrastructure is the implementation of an architecture. processors, software, databases, electronic links, data
centers, standards, skills, electronic processes... We now tend to divide computing into applications and
infrastructures
Open Standards
Open standards provide foundations for Interconnectivity Interoperability
Open standards after 1990s OSI Reference Model SQL API: standardized interface TCP/IP
Internet---Topology and Reliability Internet is a scale-free network
A small number of nodes have a large number of links while the majority of nodes only have a small number of links
Internet is robust to random failures, but vulnerable to targeted attacks
Client-Server Systems (2)---Distribution of Processing
DataManagement
ApplicationFunction
Presentation
Presentation
DistributedPresentation
DataManagement
ApplicationFunction
Presentation
RemotePresentation
DataManagement
ApplicationFunction
ApplicationFunction
Presentation
DistributedFunction
DataManagement
ApplicationFunction
Presentation
Remote DataManagement
DataManagement
DataManagement
ApplicationFunction
Presentation
DistributedDatabase
Server
Client
Network
Client-Server Systems (7)---Three-tier Client-Server Style
Server (usually DB server) connected to the network via one or more servers, and sometimes directly as well
Multiple specialized servers, some possibly dedicated to middleware (application servers)
Internet or LANs
Clients, some of which may be portable
Peer-to-Peer Computing
Concept How does P2P computing adapt to Internet
computing environment, especially in content distributation
Web Services
Concept Foundations for Web Services
Service directory: UDDI
Service description: WSDL
Service interaction: SOAP
Format description: XML Schema
Data format: XML
Communication Protocol: HTTP
Communication Network: Internet
Service-Oriented Architecture Concept, model Features: loosely-coupled, coarse-grained
and standards-based
RegistryRegistry
ClientClient
ServiceService
Advertise①
③
④ Interact
②Discover
Grid Computing
A computational grid is a hardware and software infrastructure that provides dependable, consistent, pervasive, and inexpensive access to high-end computational capabilities
Grid is a generalized network computing system that is supposed to scale to Internet levels and handle data and computation seamlessly
Transformation of Telecom Industry AT&T deregulation in 1984
Divest it LECs (RBOCs) in return for a chance in Internet services industry
The last mile problem for RBOCs in 1990s A Fire-hose-to-straw gap tbps (1012) in backbones VS. 56k or 1.2m in the last mile
RBOCs then became ILECs, and there came new competitors CLECs (competitive LECS) ILECs bundled local phone access with Internet access CLECs came up with new connection options
Cable modems, optical fiber, wireless, satellite…
Telecom Technologies and Their SpeedsBits Per Second Technologies
1011-1012 Optical fiber
1010 Optical wireless local loop(20G), WMAN (100G)
109 Microwave LANs (1.5G-2.0G), Gigabit Ethernet (1G), WMAN (24g)
108 ATM (155-622M), Faster Ethernet (100M)
107 Frame relay (10M), Ethernet (10M), WLANs(10M), cable modem (10M), Wi-Fi (11-54M)
106 Stationary 3G (2M), DSL(1.5-7M), WiMax (1.5-10M)
105 Mobile 3G (384k), ISDN (128k)
104 Modems (56k), 2.5G(57k)
103 2G (9.6-14.4k)
The Internet is the Network of Choice (4) Intranet
Internet technology used inside an enterprise
Extranet Internet technology
used to connect trading partners, customers, suppliers etc.
EIntranet
Extranet
Public Website
OSI Reference Model
HTTP
NetBIOS
SSL
TCP
IP, X.25
Ethernet, Token ring, FDDI, ISDN, ATM, Frame relay
10BaseT, twisted pair, fiber-optic cable
Application Layer
Presentation Layer
Session Layer
Transport Layer
Network Layer
Data Link Layer
Physical Layer1
2
3
4
5
6
7
Important protocols
Licensed VS. Unlicensed Frequencies Some frequencies of the radio spectrum are
licensed by governments for specific purposes; others are not
Devices that tap unlicensed frequencies are cheaper No big licensing fees Greater competition, more innovation and faster
changes Possibility of collision between signals
"Telecoms Crash"
Auctions of the 3g radio spectrum in Germany and Britain at the beginning of 2000. Although one similar auction in the USA had failed disastrously the year
before. 3G also requires an infrastructure development measured in billions of
dollars The nature of the auctions, was to offer a limited number of
licenses This put the telephone operators in a difficult position, as diabetics being
forced to bid for insulin. The stock market lost confidence (dot-com crash), influencing
the credit rating of the operators Within a year 100,000 jobs were lost in telecoms in Europe
(30,000 in UK) Subsequent government auctions of the 3g spectrum were met
with low bids