Our Changing World Changing the Rules Elements of the Networked Economy Infrastructure of the Networked Economy Information

tion Technology in Organizations

The Transition to a Networked Economy

A Look Ahead
Review

1-1 Copyright 2001, Harcourt College Publishers

 Our Changing World Changing the Rules

Our Changing World

LANs/Internet/World Wide Web

Elements of the Networked Economy Infrastructure of the Networked Economy

Dependent on computer networks Moving toward heavy use of electronic commerce Relationships are changing at
the corporate level between companies and their customers, suppliers, and employees. the individual level between friends, relatives, and colleagues.

Information Technology in Organizations

A Look Ahead
Review

1-2 Copyright 2001, Harcourt College Publishers

Moving from an industrial economy to a networked economy

 Our Changing World Changing the Rules Elements of the Networked Economy Infrastructure of the Networked Economy Information Technology in Organizations

Economic Waves
Hunter/Gatherer Agricultural Industrial Knowledge-based

A Look Ahead
Review

1-3 Copyright 2001, Harcourt College Publishers

 Our Changing World Changing the Rules

A Connected World: Computer Networks

Elements of the Networked Economy Infrastructure of the Networked Economy

Information Technology in Organizations

A Look Ahead
Review

are the nervous system of modern companies enable stakeholders to interact electronically are the foundation of what we call the Internet and the World Wide Web enable and facilitate electronic commerce both B2C and B2B are the basis of a new type of economy the networked economy

1-4 Copyright 2001, Harcourt College Publishers

 Our Changing World Changing the Rules Elements of the Networked Economy Infrastructure of the Networked Economy Information Technology in Organizations

Trends in Use of E-commerce

A Look Ahead
Review

1-5 Copyright 2001, Harcourt College Publishers

Networked economy
Our Changing World Changing the Rules Elements of the Networked Economy Infrastructure of the Networked Economy Information Technology in Organizations

Enhanced, transformed, or new economic relationships based on computer networks and human knowledge

A Look Ahead
Review

Economic relationships Knowledge

1-6 Copyright 2001, Harcourt College Publishers

 Our Changing World Changing the Rules

Elements of the Networked Economy: Economic Relationships

Stakeholder Relationships
New
Customers as unpaid employee Electronic user groups Employees as special service representatives Customers Employees Suppliers

Elements of the Networked Economy Infrastructure of the Networked Economy

Traditional

Information Technology in Organizations

A Look Ahead
Review

1-7 Copyright 2001, Harcourt College Publishers

 Our Changing World Changing the Rules

Elements of the Networked Economy: Economic Relationships

Environment Customer Customer

Elements of the Networked Economy Infrastructure of the Networked Economy Information Technology in Organizations

Employee

Management

Suppliers

A Look Ahead
Review

Employee Organization
1-8 Copyright 2001, Harcourt College Publishers

 Our Changing World Changing the Rules Elements of the Networked Economy Infrastructure of the Networked Economy Information Technology in Organizations

Differences between Industrial and Networked Economy

Scarcity Searching strategies Transactions Communications Information Storage

A Look Ahead
Review

1-9 Copyright 2001, Harcourt College Publishers

Differences between Industrial and Networked Economy

Our Changing World Changing the Rules Elements of the Networked Economy Infrastructure of the Networked Economy

Areas of Change Industrial Economy

Scarcity Land, capital Paper-based, in person Face-to-face, phone, postal, checks, cards One-to-one, one-tomany Analog

Networked Economy
Time Web-based

Searching strategies A Look Ahead Transactions

Information Technology in Organizations Review

Communication
1 - 10 Copyright 2001, Harcourt College Publishers

E-mail, Web, electronic payments Many-to-many

Digital

Information storage

 Our Changing World Changing the Rules Elements of the Networked Economy Infrastructure of the Networked Economy Information Technology in Organizations

Example of Differences-Purchasing Process

1. Requirements 2. Acquisition 3. Ownership 4. Retirement

A Look Ahead
Review

1 - 11 Copyright 2001, Harcourt College Publishers

 Our Changing World Changing the Rules Elements of the Networked Economy Infrastructure of the Networked Economy Information Technology in Organizations

Purchasing a camera Ownership process

Requirements

A Look Ahead
Review

1 - 12 Copyright 2001, Harcourt College Publishers

 Our Changing World Changing the Rules Elements of the Networked Economy Infrastructure of the Networked Economy Information Technology in Organizations

Purchasing a camera Ownership process

Requirements

A Look Ahead
Review

Acquisition

1 - 13 Copyright 2001, Harcourt College Publishers

 Our Changing World Changing the Rules Elements of the Networked Economy Infrastructure of the Networked Economy Information Technology in Organizations

Purchasing a camera Ownership process

Requirements

A Look Ahead
Review

Acquisition

1 - 14 Copyright 2001, Harcourt College Publishers

Ownership

 Our Changing World Changing the Rules Elements of the Networked Economy Infrastructure of the Networked Economy Information Technology in Organizations

Purchasing a camera Ownership process

Requirements

A Look Ahead
Review

Retirement

Old vs. New

Acquisition

1 - 15 Copyright 2001, Harcourt College Publishers

Ownership

 Our Changing World Changing the Rules Elements of the Networked Economy Infrastructure of the Networked Economy Information Technology in Organizations

Ten Ways the Rules are Changing

1. Matter 2. Space 3. Time 4. People 6. Value 7. Efficiency 8. Markets 9. Transactions 10. Impulse

A Look Ahead
Review

1 - 16 Copyright 2001, Harcourt College Publishers

5. Growth

 Our Changing World Changing the Rules Elements of the Networked Economy Infrastructure of the Networked Economy Information Technology in Organizations

Matter
It matters less! Concrete and bricks vs bits and bytes Value of Amazon.com vs Barnes & Noble

A Look Ahead
Review

1 - 17 Copyright 2001, Harcourt College Publishers

 Our Changing World Changing the Rules Elements of the Networked Economy Infrastructure of the Networked Economy Information Technology in Organizations

Space
Distance is dead and boundaries no longer exist! Communications can take place instantly over great distances Competition is worldwide No company is safe is its local market

A Look Ahead
Review

1 - 18 Copyright 2001, Harcourt College Publishers

 Our Changing World Changing the Rules Elements of the Networked Economy Infrastructure of the Networked Economy Information Technology in Organizations

Time
Its disintegrating Web year = a fraction of chronological year Move fast or be left behind!

A Look Ahead
Review

1 - 19 Copyright 2001, Harcourt College Publishers

 Our Changing World Changing the Rules Elements of the Networked Economy Infrastructure of the Networked Economy Information Technology in Organizations

People
They are more important than ever
Customers Employees Suppliers

A Look Ahead
Review

1 - 20 Copyright 2001, Harcourt College Publishers

Good ideas are hard to find and worth a great deal Lock in good employees with stock options

 Our Changing World Changing the Rules Elements of the Networked Economy Infrastructure of the Networked Economy Information Technology in Organizations

Growth
Accelerated by the network Network-enhanced word of mouth First-mover advantage worth more

A Look Ahead
Review

1 - 21 Copyright 2001, Harcourt College Publishers

 Our Changing World Changing the Rules

Value

Elements of the Networked Economy Infrastructure of the Networked Economy Information Technology in Organizations

Enhanced by network externalities Metcalfs law

A Look Ahead
Review

1 - 22 Copyright 2001, Harcourt College Publishers

 Our Changing World Changing the Rules Elements of the Networked Economy Infrastructure of the Networked Economy Information Technology in Organizations

Efficiency
Buyers can deal directly with sellers Old-time middlemen are being threatened Being replaced by infomediaries

A Look Ahead
Review

1 - 23 Copyright 2001, Harcourt College Publishers

 Our Changing World Changing the Rules Elements of the Networked Economy Infrastructure of the Networked Economy Information Technology in Organizations

Markets
Buyers are gaining dramatic new power Sellers are finding new opportunities Intelligent software helps buyers find the best deal. Businesses that offer unique services or lower costs will flourish,

A Look Ahead
Review

1 - 24 Copyright 2001, Harcourt College Publishers

 Our Changing World Changing the Rules Elements of the Networked Economy Infrastructure of the Networked Economy Information Technology in Organizations

Transactions
It's a one-on-one game. Information is easier to customize than hardware and customers will demand custom products Information portion of any good or service is becoming a larger part of its total value.

A Look Ahead
Review

1 - 25 Copyright 2001, Harcourt College Publishers

 Our Changing World Changing the Rules Elements of the Networked Economy Infrastructure of the Networked Economy Information Technology in Organizations

Impulse
Virtually any product is available everywhere No physical barriers between wanting and buying The processes for marketing, sales, and fulfillment are merging.

A Look Ahead
Review

1 - 26 Copyright 2001, Harcourt College Publishers

Affected Company Categories

Our Changing World

Category

Description
Companies that exist because of the Internet and the Web. Companies that use the Web to carry out alreadyexisting business activities in a new way. Companies that have used the Web to creatively destroy their existing business, transforming themselves into a different type of company or a company that has different business activities. Companies that are trying to adapt by using electronic commerce for an existing business activity. Companies that will be endangered by the introduction of electronic commerce or are ignoring it.

Examples
Yahoo! Mindspring Amazon.com, NetB@nk UPS, Edmunds Dell Computers

Changing the RulesInternet Elements of Companies the Networked New Economy

Approaches Infrastructure of the Transformed Networked Economy

Information Technology in Organizations

A Look Ahead

Adapting Review Hurt by Electronic Commerce

1 - 27 Copyright 2001, Harcourt College Publishers

Delta Airlines, Lands End Malls, Construction companies

 Our Changing World Changing the Rules

Elements of the Networked Economy: Computers What is infrastructure?

The underlying foundation or basic framework of a system or an organization.

Elements of the Networked Economy Infrastructure of the Networked Economy Information Technology in Organizations

A Look Ahead
Review

Information Technology is the infrastructure of the networked economy

IT consists of chip-based technology and communication networks. IT refers to all forms of technology used to create, store, exchange, and use information in its various forms (http://whatis.com).

1 - 28 Copyright 2001, Harcourt College Publishers

The Evolution of Information Systems

Our Changing World Changing the Rules Elements of the Networked Economy Infrastructure of the Networked Economy Information Technology in Organizations

A Look Ahead
Review

Wisdom Knowledge
1 - 29 Copyright 2001, Harcourt College Publishers

Information

Data

IT in Organizations: IS Functions and the IS Cycle

Our Changing World Changing the Rules Elements of the Networked Economy Infrastructure of the Networked Economy Information Technology in Organizations

Remembering the past

Data
People and technology

Information

A Look Ahead
Review

Handling the present

1 - 30 Copyright 2001, Harcourt College Publishers

Preparing for the future

Decisions

 Our Changing World Changing the Rules

Using IS Functions to deal with Business Risks

Elements of the Networked Economy Infrastructure of the Networked Economy

IS can help reduce the three risks that businesses face: Demand Risk risk of lowered demand
IS can enable improved customer service.

Information Technology in Organizations

A Look Ahead
Review

Efficiency Risk risk of higher costs due to inefficiencies

IS can allow more efficient handling of transactions.

1 - 31 Copyright 2001, Harcourt College Publishers

Innovation Risk risk of failing to keep up with competitors innovations

IR can be reduced through appropriate new uses of IT.