The Opportunities and Challenges Ahead Chapter 15 Information

The Opportunities and Challenges Ahead Chapter 15 Information Systems Management in Practice 8 th Edition © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Chapter 15 l l Introduction Hot Issues - Challenges or Opportunities? l l Navigating Information Overload Green Computing Virtualization and Parallelization IT Talents and Globalization © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -2

Chapter 15 l Organizing Principles l l l l The Learning Organization Processes Rather Than Functions Communities Rather Than Groups Virtual Rather Than Physical Self-Organizing Rather Than Designed Adaptable Rather Than Stable Distributed Rather Than Centralized © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -3

Chapter 15 l Capturing the World of Connections l l Moving Forward l l The Internet Mindset Where’s the Value in a Network The Rules of Networks Understanding Users Increasing Executives’ Understanding of IT Educating IS About the Business Conclusion © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -4

A Framework for IS Management © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -5

Introduction l E-world here to stay! l l Yes, even after dot com bubble burst Internet-based economy l l l Its continuing impact on business strategies, work environments and skills What are the issues? How can enterprises leverage the power of Internet? © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -6

Hot Issues - Challenges or Opportunities © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -7

Navigating Information Overload l Risk and costs of cognitive overload due to information abundance l l 988 billion gigabytes of data by 2010! Strategies enterprises can use to filter data and content l l SEARCH paradigm Data mining and analysis for business intelligence © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -8

Green Computing l We need energy to sustain computing l l l Data centers l Google’s massive “cloud computing” energy requirements Better technology to reduce computing energy consumption E-waste: Dark side of digital age l Government regulations l Electronic Product Environmental Assessment Tool (U. S. ) l Restriction of Hazardous Substances (European Union) l China and other third-world countries? © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -9

Virtualization and Parallelization l Virtualization l l l Techniques that simulate multiple self-contained application environments on a single physical server Benefits include l Scalable resources (partitioning) l Simple encapsulation (single virtual environment) l Increased security (isolated from physical host machine) l Reduced energy consumption Parallelization l Parallel processing on multiple core l Think Intel 64 -bit Core 2 Duo processor architecture © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -10

IT Talents and Globalization l Severe global IT talent shortage in next ten years predicted! l Technological obsolescence l l The training and learning never stops! Age discrimination What are the jobs for MIS majors today? Organizations need to develop HR strategies to address issue © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -11

Organizing Principles How to Succeed in the Internet Economy © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -12

The Learning Organization l Five basic learning principles l l l Personal mastery l Lifelong learning (continual clarification) Mental models (schemas) l Looking inward (challenging assumptions) Shared Vision l Organizations view of its purpose Team Learning l Dialog (even dialectic) Systems Thinking l The whole is not the sum of its parts © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -13

Processes Rather Than Functions l A process is a combination of tasks l l Reengineering for a process-centered structure l l Focus on group rather than an individual Self-organizing, teamwork l organizational processes spans departments Ramifications of process orientation l l l Process ownership Measures of a process (can be difficult) Professionals vs. workers l Possess greater knowledge and a customer-orientation © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -14

Communities Rather Than Groups l Communities vs. groups l Communities arise out of spontaneity and volition l l Groups are formed purposely by design l l e. g. communities of practice E. g. task force Communities are building blocks of an organization (a social environment) l l l People Learning Participation © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -15

National Semiconductor Case Example: Communities of Practice (Co. P) l CEO: Build core competence in mixed signal technology and phase lock loops l Co. Ps to mobilize engineers from numerous product lines l l Swapped ideas, insights and solutions Team-based efforts Library of knowledge l Chip design reviews, best practices, know-how Funding provided for Web-based Co. Ps © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -16

Virtual Rather Than Physical l Virtual Organization l Exists wherever (space) and whenever (time) the participants happen to be l l Might this perspective be too sanguine? Global integration and coordination but local adaptability l How does this arrangement work in a virtual context? © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -17

Sun Microsystems Case Example: Virtual Organizations l Organizational culture and structure based on electronic network characteristics l l l Email flow (how much you have) l Determines existence and identity in organization Mailing list (which one you are on) l Determines status and power in organization Director manages organization by monitoring the electronic network activities l e. g. new project, major event © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -18

Self-Organizing Rather Than Designed l Self-organizing (or emergent) systems create their own structure, patterns of behavior and process to accomplish the work l l l E. g. , l Semco S. A. , workers set their own production quotas, take initiative to redesign product, define new marketing strategies l the Open Source movement Based on self-governance, self-replication, partial learning and some self-repair Contingent on freedom and trust © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -19

Semco, S. A. Case Example: Self-organizing principle l Brazilian manufacturing firm is touted “world’s most unusual workplace” l Break all rules to cut costs and up productivity l Employees set own standards and are empowered § § § l Production quotas, choose own boss, influence product designs and marketing plans Unlimited access to company information, training (e. g. read accounting statements) Voluntary attendance at meeting, profit-sharing voting rights Radical “democratic workplace” evolved over stages l 600 percent company growth © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -20

Adaptable Rather Than Stable l Organizations must be built to change in today’s e-economy l l IT increases connectivity, which heightens volatility Organizational change is difficult and costly l l Paradigm: organizations structured for stability and minimal change Achieve adaptability through distributed intelligence and action l Focus on individuals as agents of change © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -21

Capital One What’s in your wallet? Case Example: Organizational adaptability l Information-based strategy to develop consumer financing products l l Developed core competence in IT-based test design (statistical analysis) Constantly “testing” the market (first-mover advantage) l “balance transfer” a winning offer Some control: Management use veto power to determine funding for on-the-fly new product development based on test results Fourth largest U. S. firm in diversified financials © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -22

Distributed Rather Than Centralized l Distributed Capitalism l l Developing a relationship with customers by tapping into their needs l Need for sanctuary (control over time and activities) l Need for voice (freedom of speech) l Need for connection (trust) Market-based organizations l Decreasing cost of communication enables organizations to structure themselves to become democracies l Empowering people is key to the new kingdom § § Needs lots of communication, new skills, and new attitudes toward risk and control Shift from command control to coordinate and cultivate © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -23

Capturing the World of Connections © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -24

The Internet Mindset l What should the organization mindset be of the global online world? l Communication is personal, not mass market l l Customer contact is interactive, not broadcast l l Two-way communication Customer service time frame is theirs, not yours l l Starts with the customer and needs Fast response to requests and concerns The culture is bottom-up, not top-down l Value proposition begins with soliciting customer input © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -25

Where’s the Value in a Network? l How to leverage the Internet to gain value? l Back-end intelligence (value core) l IT architecture and infrastructure should focus on centralization (shared resources), stability, scalability and standardization § l Facilitates Web services (data storage and processing) Front-end intelligence (value periphery) l l Web interface is customer touchpoint Should be decentralized (specialized devices), flexible, personalized and sensitive to context © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -26

Where’s the Value in a Network? cont’d l Intelligence engenders value, but front-end and back -end components must be decoupled l l Different capabilities and strategies needed at core and periphery to optimize value creation l Core: value in orchestration (business ecosystem) l Periphery: value in modularity (“plug and play”) New kinds of business can be created by understanding these value dynamics l e. g. “reassembly” § Organizing disparate pieces of intelligence to create personalized offerings (one-stop Web site) © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -27

The Rules of Networks l A connected world has three distinguishing features l l It is global Biased toward ‘software’ (Information, ideas, relationships) Intensely linked Accordingly, rules of networks include l Aim for relationship tech. l l Increasing quantity and quality of economic relationships Follow the free l l Scale economies and near-zero marginal cost But Porter (2001) argues that indirect profitability is wrong? § l Web 2. 0 firms (e. g. , You. Tube, Face. Book) not making money Feed the Web first l Analogy: Save our planet so we continue to live on it © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -28

Moving Forward © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -29

Understanding Users l l Understanding people’s comfort levels for new technology is as important as the technology itself A “Diffusion of Innovation” framework l l l 500, 000 innovators (constantly sniffing out latest tech) 5 million early adopters 30 -35 million early majority adopters 40 -50 million late majority adopters 10 -15 million technically adverse © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -30

Diffusion of Technology Innovation © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -31

Increasing Executives’ Understanding of IT l l Many business executives view IT only as a means to achieve operational effectiveness How can CIOs and IS professionals influence their view of IT to one of gaining competitive advantage? l IS leadership and governance l l Strategic IT vision, measurement of IT value, costbenefits, change management, control Learning (see next slide) © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -32

Educating IS About the Business l Learning by doing l l Learning by governing l l Giving responsibility for IT project(s) Being part of governance team that sponsors IT projects Learning via educational programs l Executive IT workshops l e. g. Shidler College executive education programs? © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -33

Conclusion l Network world requires different way of thinking l l l People-to-people relationships Natural phenomena not human-designed structures Technology is simply the underpinning l l IT becomes about business Focus on human aspects of IT © 2009 Pearson Education, Inc. Publishing as Prentice Hall 15 -34

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