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Role of IT in the three types of economy: industrial, information, and digital
- Industrial: Used to perform existing information work more quickly and efficiently
- Information: Used to manage work better
- Digital: Makes pervasive changes in the structure and operation of work, business practices, organizations, industries, and the global economy
What determines market power for a firm?
The point within a value chain where maximum economies of scale and scope
Why is globalization a two-way street?
- Internet allows small firms to have global reach, but local tastes still matter
- Ex. Walmart going into Germany
What is decapitalization
- Power of intangibles (ideas and knowledge) are now more important than tangibles (buildings, capital, equipment)
- Managing talent is as important as managing finances
Internal organization has gone from __-__ to __-__
- Supply-Push, Demand-Pull
- Customers now shape products
How are outsourcing and strategic alliances important in the internal organizational environment?
- Firms should focus on core competency
- Don't waste resources on things the firm doesn't do well
What is causing the demise of hierarchy?
- Cannot cope with rapid change
- It takes too long to communicate up and down the chain
IT competitive advantage is created by?
IT competitive advantage isn't in the technology itself, but what is done with it
- Enterprise Resource Planning
- ERP systems consolidate all business operations into a uniform and enterprise-wide system environment.
- Expensive and troublesome, especially for companies wanting to modify the ERP software to fit their "unique" processes
- A fundamental organizational change
- Ex. SAP, PeopleSoft
Proprietary vs Open software systems
- Proprietary - Microsoft - all programs require windows
- Open - IBM - want a standard that all applications can use - the push now is for open systems