Introduction to Information Systems Chapter 12

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Introduction to Information Systems Essentials for the Internetworked E-Business Enterprise

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C h a p t e r

James A. O’Brien

12 Enterprise and Global

Management of

e-Business Technology

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• Identify several ways that information technologies have affected the job of managers in e-business companies.

• Explain how problems of information system performance can be reduced by the involvement of business managers in IS planning and management.

• Identify the seven major dimensions of the e-business organization and explain how they affect the success of e-business companies.

Chapter Objectives

Introduction to Information Systems Chapter 12

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• Identify each of the three components of

e-business technology management and

use examples to illustrate how they might

be implemented in e-business enterprise.

• Identify several cultural, political, and

geoeconomic challenges that confront

managers in the management of global e-

business technologies.

Chapter Objectives

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• Explain the effect on global e-business

strategy of the trend toward a

transnational business strategy by

international business organizations.

• Identify several considerations that affect the choice of IT applications, IT platforms, data access policies, and systems development methods by a global e-business enterprise.

Chapter Objectives

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Managing e-Business Technologies

E-Business

•Agility, Flexibility

•Business Strategies

•Supply Chain

•Total Quality

Suppliers Business Partners

Customer Value

•Responsiveness

•Accountability

•Lower costs

Information Technology Developments

•Global and enterprise

computing; intranets

•IT infrastructure

National Gobel in Brief

Products : TV, Audio, Refrigerator, Air Conditioner, Washing Machine,

Electric Fan, Electric Iron, Pump, Car Audio, Pants Press

Brand :

Established : July 27, 1970

Capital : US$ 23 Million

Share holders : Matsushita Electric Industrial Co. Ltd. (60%)

Gobel International (40%)

Employees : 3,204 (April 2003)

Sales (2002) : Rp. 1.8 Trillion (27% export)

Audio Factory Air Conditioner Factory Refrigerator Factory

NABEL, 3/7/2003

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•ISO CERT. •ANTI DUMPING •ENERGY SAVING •RECYCLING

Domestic

Market

Government

University

•Regulation

•Incentive

•Certification

•Apprenticeship

•Research

Global : WTO

Regional : APEC Sub-Regional : AFTA

Manufacturer

•HIGH QUALITY •COST •SPEED •GLOBAL MODEL

Competitiveness

Export

Market

•Vision

•Policy

Global Competitiveness NABEL, 3/7/2003

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Business Quality Improvement

Traditional Organization Business Reengineering

E-Organization

Organization

Structure

Target

Leadership

Potential Payback

People and

Culture

Risk

Coherence

What Changes?

Knowledge

Primary

Alliances

Incrementally Improving Existing Processes

Hierarchical

Existing Processes Radically Redesigning Business Systems

Horizontal, networked

Business Systems

Any Process

Centralized focus

Strategic Business Processes

Everyone is a leader

Processes

10%-50% Improvements 10%-50% Improvements 10-Fold Improvements 10-Fold Improvements

Low Low High High

Same Jobs - More Efficient Same Jobs - More Efficient Big Job Cuts; New Jobs; Major Job Redesign

Big Job Cuts; New Jobs; Major Job Redesign IT and Work Simplification

IT and Organizational

Customer relevance

Institutional

Delegated authority

Collaboration rewarded

Governance

Internal relevance

Individualistic

Ally with distant partners

Complement current gaps

Top-down

Vertical decision making

Individuals rewarded

Distributed

Ally with competitors, customers

and suppliers

Create new value

The e-Business Organization

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A company that cannot change the way it thinks

about Information Technology cannot re-engineer

Shared databases

Telecommunications

networks

Expert Systems

Decision Support Tools

(database access,

modeling software)

Distruptive

Technology Old Rule

Information can appear

in only one place

at one time

Business must choose

between centralization

and decentralization

Only expert can perform

complex work

Managers make all

decisions

New Rule

Information can appear

simultaneously in as many

places as it is needed

Business can

simultaneously reap the

benefits of centralization

and decentralization

A generalists can do the

work of an expert

Decision-making is part

of everyone’s job

Source: Reengineering The Corporation - Michael Hammer & James Champy

The Role of Information Technology NABEL, 3/7/2003

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Example of organizational structure of an e-business enterprise

Global

Executive

Core

E-commerce

Business Unit

Consumer

Products

Business Unit

Shared IT

Support

Services

Business Unit

Shared Administrative

Support Services

Business Unit

Industrial

Products

Business Unit

Financial

Services

Business Unit

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e-Business Technology Management

Managing

the IT

Organization

Managing

e-Business IT

Strategy

Managing

Application

Development &

Technology

e-Business

Technology

Management

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IT Strategic Planning Management

E-Business

Application

Development &

Deployment

E-Business IT

Strategies and

Architecture

E-Business

Strategies and

Models

Customer and

Business

Value Visioning

Key Insights

Key Objectives

Priorities

More Questions

Feedback

Feedback

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Benefits Derived from Company IT Planning

• Reduced support costs

• Reduced complexity

• Expertise portability

• Interoperability

• Volume discounts

• Reduced training costs

• Information sharing

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Managing the IS Function

Application Development

•Systems Analysis

•Systems Design

•Programming

•System Maintenance

IT Operations Management

•Network Management

•Production Control

•Product Support

•Systems Performance

Human Resource Management

•IS Recruiting

•Training

•Retainment Programs

•Support Staff

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Global e-Business Technology Management

Systems Development

Data Resource

Management

Internet-based Technology Platforms

e-Business Application Portfolios

e-Business/IT Strategies

Global IT Management

Cultural, Political, and Geoeconomic

Challenges

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Global e-Business Strategies

Transactional

-Virtual e-Businesses

-World Markets

-Transparent

Manufacturing

-Global Supply Chain

-Global Alliances

International

-Autonomous

operations

-Region Specific

-Vertical Integration

-Specific Customers

-Captive

Manufacturing

Global

-Global Sourcing

-Multiregional

-Horizontal Integration

-Some transparency of

customers and

production

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Business Drivers for Global e-Business

Global Customers

Global Products

Global Operations

Global Resources

Global Collaboration

Business Drivers for Global e-Business

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Global IT Platform Issues

Global Systems Development

•Local vs. Global Requirements •Multilingual Needs •Standardization of Data •Scheduling Global Activities

Global Infrastructure

•Global Data Access •Regulated Access •Transborder Data Flows

Global Computing Facilities

•Hardware acquisitions •Import restrictions •Software compatibility •Local service •Balancing workloads •Lack of spare parts

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Chapter Summary

• e-Business technologies are changing the distribution, relationships, resources, and responsibilities of managers.

• High-quality information system performance is dependent on extensive and meaningful management and user involvement in the governance and development of IT applications.

• The organizational structure and roles of e-business companies are undergoing major change as they strive to become customer-focused.

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Chapter Summary (cont)

• Managing IT in an e-business has three

major objectives:

– Managing the joint development and

implementation of e-business IT strategies.

– Managing the development of e-business

applications and the research and

implementation of new technologies.

– Managing IT processes, professionals, and

subunits within the company.

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Chapter Summary (cont)

• Managing global e-business technologies

includes:

– Dealing with cultural, political, and geoeconomic

challenges posed by various countries.

– Developing appropriate business and IT

strategies.

– Developing a portfolio of global e-business and

e-commerce applications and an Internet-based

technology platform to support them.

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Chapter Summary (cont)

• Many businesses are becoming global

companies and moving towards

transnational e-business strategies in

which they integrate the global business

activities of their subsidiaries and

headquarters.