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The Networked Economy:
A new way of doing business
Copyright © 2001 by Harcourt, Inc. All rights reserved.
Part 1Part 1
2001
Our Changing World• Computer networks• Internet/World Wide Web• Electronic commerce• Networked economy-
Enhanced, transformed, or new economic relationships based on computer networks and human knowledge
• Web time - Web year
2001
GLOBALIZATION
• Track and Place orders internationally
• 24 hour / 7 day operation
• Communicate via Networks
• Competition in World Markets
• Global Workgroups
• Global Delivery Systems
2001
Our Changing WorldPurchasing a camera
Ownership processRequirements
2001
Our Changing World
Purchasing a cameraRequirements
Acquisition
2001
Our Changing World
Purchasing a cameraRequirements
Acquisition
Ownership
2001
Our Changing World
Purchasing a cameraRequirements
Acquisition
Ownership
Retirement
Old vs. New
Old vs. New
Old vs. New
Old vs. New
2001
Changing the Rules
• Scarcity land, capital time• Searching paper-based, Web-based
strategies in person • Transactions face-to-face, e-mail, Web,
phone, mail electronic checks, cards payments
• Communication one-to-one, many-to-manymany-to-many
• Information analog digital storage
Areas of Change Industrial Economy Networked Economy
2001
TRANSFORMATION OF ENTERPRISE• Flattening• Empowerment• Decentralization (multinational)• Location Independence (virtual)• Collaborative Work• Low Transaction Costs • Flexibility (decision making)
*
2001
Changing the Rules• Metcalf’s law
2001
Changing the Rules• Intelligent agents
• Electronic communities
• Analog to digital conversion
• Creative destruction
2001
Elements of the Networked Economy
The networked economy triangle
EconomicRelationshipsC
ompu
ters
Connectivity
Knowledge
ChipChip BandwidthBandwidth
HumanHuman
2001
Elements of the Networked Economy
Possible Relationships in the Networked Economy
INTRAnet
EXTRAnet
2001
Elements of the Networked Economy
Converting data to information
Data Processing Information
•Knowledge
•Knowledge Workers
2001
Elements of the Networked Economy
Data and informationDepartmentA Payroll
DepartmentB Payroll
DepartmentC Payroll
DepartmentD Payroll
DepartmentE Payroll
CompanyPayroll
EmployeePay
EmployeePay
EmployeePay
Hours
Pay Rate
2001
Infrastructure of the Networked Economy
• Information technologyAll forms of technology used to create, store, exchange, and use information in its various forms
–Hardware
–Software–Programs
2001
Infrastructure of the Networked Economy
• Personal productivity software (tools)
• Organizational productivity (network)
• Processing transactions
2001
Information Technology in Organizations
• Systems–Input–Processing–Output–Feedback
• Information systems (IS)
2001
Information Technology in Organizations
Shared processing to shared information
Shared Processing
Personal Computing
Shared Information and Resources
2001
How Information Systems Affect Organization
• Economic– Human Costs– Transaction Costs– Decision Making Costs– Change in Operating Procedures– Political Issues - security, control
2001
Information Technology in Organizations
Fareastfoods.Com
2001
Information Technology in Organizations
Fareastfoods.Com
Fareastfoods.comOrder System
CustomerFoodOrder
Feedback from Customer
Delivery ofFood Item
2001
Information Technology in Organizations
Data, knowledge, information, and decisions
Data
Information
Knowledge
DecisionsProcessing
InterpretationRequest
2001
Information Technology in Organizations
Information Systems CycleInformation Systems Cycle
Tran
sact
ions
Data Storage
Decisions
Remember the Past
Preparing forthe Future
Handlingthe Present
People andTechnology
2001
Information Technology in Organizations
Transaction Processing System
Transactions
DataEntry
TransactionProcessing
OrganizationalMemory
A Look Ahead... (Database)
2001
Information Technology:Infrastructure of the Networked Economy
Chapter 2