Midterm Review

Chapter 1. IS Management Overview

The Internet Economy

From APARTNET to today’s Internet WWW has evolved from a graphical layer of the

Internet to a cyberspace for business eRetailers, eMarkets, eAggregators, Informediaries,

Exchanges, Portals

Dot-com crash Pure Internet economy VS. the hybrid model

Business Ecosystems

An ecosystem is a web of relationships surrounding one or a few companies They appear to follow biological rules Various players in one's business ecosystem

Suppliers, distributors, retailers, competitors, banks, advertising agencies etc.

From Supply-Push to Demand-Pull Supply-push

Companies did their best to figure out what customers wanted

Organized to build a supply of products or services and then ‘push’ them out to end customers on stores shelves, in catalogs etc.

Demand-pull Allows much closer and ‘one-to-one’ contact between

customer and seller Offer customers the components of a product/service

then the customer creates their own version by ‘pulling’ what they want

Outsourcing and Strategic Alliances To become more competitive, organizations

are examining types of work that should be done internally or externally by others The thinking is: We should focus on what we do

best and outsource the other functions to people who specialize in them

Ranges from a simple contract for services to a long-term strategic alliance

Demise of Hierarchy

Hierarchical structures cannot cope with rapid change Communications up and down the chain of

command takes too much time for today’s environment

Self-managed groups produce higher performance IT enables team-based organizational structures

by facilitating rapid and far-flung communication

The Mission of Information Systems Early days: "paperwork factories" to pay

employees, bill customers, ship products etc.

MIS era: producing reports all levels of management “Get the right information to the right person at the

right time.”

Today: Improve the performance of people in organizations through the use of information technology.

A Framework for IS Management

Chapter 2. The Top IS Job

Waves of Innovation

Source: Kenneth Primozic, Edward Primozic, and Joe Leben, Strategic Choices: supremacy, Survival, or Sayonara (New York: McGraw-Hill, 1991)

Traditional Functions Are Being Nibbled Away (1) The traditional set of responsibilities for IS :

Managing operations of data centers, remote systems, and networks

Managing corporate data Performing systems analysis and design, and

constructing new systems Systems planning Identifying opportunities for new systems

Traditional Functions Are Being Nibbled Away (2)

Distributed systemsEver more knowledgeable usersBetter application packagesOutsourcing

New Roles Are Emerging---The Squeeze on Traditional IS

Activities

New Roles Are Emerging---Roles for IS

Toward IS Lite

Major IT Eras

Four Aspects of the CIO Role

Leading Creating a vision by understanding the business

Governing Establishing an IS Governance structure

Investing Shaping the IT portfolio

Managing Establishing credibility and fostering change

Leading: Creating a Vision by Understanding the Business Seven approaches to understanding the

business and its environment: Encourage project teams to study the marketplace Concentrate on lines of business Sponsor weekly briefings Attend industry meetings with line executives Read industry publications Hold informal listening sessions Partner with a line executive

Investing: Shaping the IT Portfolio IT investments has gained increased attention

CIOs were usually falsely blamed for making poor IT investment

Two key IT investment topics What to invest in (strategic) How to make investment decision (tactical)

IT portfolio management Systematic management of large classes of planned

IT initiatives, projects, and ongoing IT services etc.

Chapter 3. Strategic Use of IT

Strategic Use of Information Systems "Working inward"

Improving a firm's internal processes and structure "Working outward"

Improving the firm's products and relationships with customers "Working across"

Improving its processes and relationships with its business partners

Whither the Internet Revolution? British Railway Revolution – the mania started in

1830s and experienced a crash in 1845 10 fold increase in 1910, 65 years after the crash

During boom, great excitement and small companies flourished

After crash, glamour gone, business became serious and full of hard work

Industry became orderly and profits began to reflect real returns

Investment frenzy for connection technology: "race for space"

Does IT Still Matter?

"IT Doesn't Matter" – article by Nicholas Carr in Harvard Business Review May 2003

What makes a resource truly strategic is not ubiquity but scarcity As information technology's power and ubiquity have

grown, its strategic importance has diminished. Being now available and affordable to all, IT has

evolved from potentially strategic resources into commodity factors of production.

Jumping to a New Experience Curve (1) Strategically using IT to work outward is

highly competitive and innovative Technology updates occur frequently, forming a

set of connected experience curves Each curve represents a new technology or

combination thereof in a product or service as well as in its manufacture and/or support

Moving to a new curve requires substantial investment in a new technology

Establishing Close and Tight Relationships (2) 3 level of systems integration between

companies Loose: provide ad hoc access to internal information

Business processes remain distinct Close: two parties exchange information in a formal

manner Processes are distinct, but some tasks are handled jointly

Tight: two parties share at least one business process High volumes of possibly confidential data are exchanged

Chapter 4. IS Planning

Tradition Strategy Making

Assumptions: The future can be

predicted Time is available to

do these 3 parts IS supports and

follows the business Top management

knows best (broadest view of firm)

Company: like an "Army"

Business Strategy

•Business decision•Objectives and direction•Change

System Strategy

•Business-based•Demand-oriented•Application-focused

IT Strategy

•Activity-based•Supply-oriented•Technology-focused

Supportsbusiness

DirectionFor IS

Infrastructure and services

Needs and priorities

Step 1Where is the business going and why?

Step 2What is required?

Step 3How can it be delivered?

Today's Sense-and-Response Approach (1)

Let strategies unfold rather than plan them: A sense-and-respond

approach when predictions are risky Sense a new opportunity

and immediately respond by testing it

Myriad of small experiments

Time

TimeStrategic envelop

Old-era strategyOne big choice, long commitment

New-era strategyMany small choices, short commitments

Stages of Growth

Richard Nolan et al observed four stages in the introduction and assimilations of a new technology Early Successes

Increased interest and experimentation Contagion

Interest grows rapidly; growth is uncontrolled; learning period for the field

Control Efforts begun toward cost reduction and standardization

Integration Dominant design mastered; setting the stage for newer

technology

Five Forces Analysis of the Internet The Internet tends to dampen the profitability of

industries Increases the bargaining power of buyers Decreases barriers to entry Increases the bargaining power of suppliers Increases the threat of substitute products and

services Intensifies rivalry among competitors

Success depends on offering distinct value Firms should focus on their strategic position in an

industry and how they will maintain profitability

Chapter 5. Distributed Systems

Definition: IT Architecture VS. IT

Infrastructure An IT architecture is a blueprint showing how the parts will interact and interrelate. System, information, departments... Multiplicity of structures and views

An IT infrastructure is the implementation of an architecture. processors, software, databases, electronic links, data

centers, standards, skills, electronic processes... We now tend to divide computing into applications and

infrastructures

Open Standards

Open standards provide foundations for Interconnectivity Interoperability

Open standards after 1990s OSI Reference Model SQL API: standardized interface TCP/IP

Internet---Topology and Reliability Internet is a scale-free network

A small number of nodes have a large number of links while the majority of nodes only have a small number of links

Internet is robust to random failures, but vulnerable to targeted attacks

Client-Server Systems (2)---Distribution of Processing

DataManagement

ApplicationFunction

Presentation

Presentation

DistributedPresentation

DataManagement

ApplicationFunction

Presentation

RemotePresentation

DataManagement

ApplicationFunction

ApplicationFunction

Presentation

DistributedFunction

DataManagement

ApplicationFunction

Presentation

Remote DataManagement

DataManagement

DataManagement

ApplicationFunction

Presentation

DistributedDatabase

Server

Client

Network

Client-Server Systems (7)---Three-tier Client-Server Style

Server (usually DB server) connected to the network via one or more servers, and sometimes directly as well

Multiple specialized servers, some possibly dedicated to middleware (application servers)

Internet or LANs

Clients, some of which may be portable

Peer-to-Peer Computing

Concept How does P2P computing adapt to Internet

computing environment, especially in content distributation

Web Services

Concept Foundations for Web Services

Service directory: UDDI

Service description: WSDL

Service interaction: SOAP

Format description: XML Schema

Data format: XML

Communication Protocol: HTTP

Communication Network: Internet

Service-Oriented Architecture Concept, model Features: loosely-coupled, coarse-grained

and standards-based

RegistryRegistry

ClientClient

ServiceService

Advertise①

③

④ Interact

②Discover

Grid Computing

A computational grid is a hardware and software infrastructure that provides dependable, consistent, pervasive, and inexpensive access to high-end computational capabilities

Grid is a generalized network computing system that is supposed to scale to Internet levels and handle data and computation seamlessly

Chapter 6. Managing Telecomms

Transformation of Telecom Industry AT&T deregulation in 1984

Divest it LECs (RBOCs) in return for a chance in Internet services industry

The last mile problem for RBOCs in 1990s A Fire-hose-to-straw gap tbps (1012) in backbones VS. 56k or 1.2m in the last mile

RBOCs then became ILECs, and there came new competitors CLECs (competitive LECS) ILECs bundled local phone access with Internet access CLECs came up with new connection options

Cable modems, optical fiber, wireless, satellite…

Telecom Technologies and Their SpeedsBits Per Second Technologies

1011-1012 Optical fiber

1010 Optical wireless local loop(20G), WMAN (100G)

109 Microwave LANs (1.5G-2.0G), Gigabit Ethernet (1G), WMAN (24g)

108 ATM (155-622M), Faster Ethernet (100M)

107 Frame relay (10M), Ethernet (10M), WLANs(10M), cable modem (10M), Wi-Fi (11-54M)

106 Stationary 3G (2M), DSL(1.5-7M), WiMax (1.5-10M)

105 Mobile 3G (384k), ISDN (128k)

104 Modems (56k), 2.5G(57k)

103 2G (9.6-14.4k)

The Internet is the Network of Choice (4) Intranet

Internet technology used inside an enterprise

Extranet Internet technology

used to connect trading partners, customers, suppliers etc.

EIntranet

Extranet

Public Website

OSI Reference Model

HTTP

NetBIOS

SSL

TCP

IP, X.25

Ethernet, Token ring, FDDI, ISDN, ATM, Frame relay

10BaseT, twisted pair, fiber-optic cable

Application Layer

Presentation Layer

Session Layer

Transport Layer

Network Layer

Data Link Layer

Physical Layer1

2

3

4

5

6

7

Important protocols

Wireless Networks

Licensed VS. Unlicensed Frequencies Some frequencies of the radio spectrum are

licensed by governments for specific purposes; others are not

Devices that tap unlicensed frequencies are cheaper No big licensing fees Greater competition, more innovation and faster

changes Possibility of collision between signals

"Telecoms Crash"

Auctions of the 3g radio spectrum in Germany and Britain at the beginning of 2000. Although one similar auction in the USA had failed disastrously the year

before. 3G also requires an infrastructure development measured in billions of

dollars The nature of the auctions, was to offer a limited number of

licenses This put the telephone operators in a difficult position, as diabetics being

forced to bid for insulin. The stock market lost confidence (dot-com crash), influencing

the credit rating of the operators Within a year 100,000 jobs were lost in telecoms in Europe

(30,000 in UK) Subsequent government auctions of the 3g spectrum were met

with low bids

The Role of the IS Department Three roles of IS department

Create the telecom architecture Connectivity Interoperability

Operate the network Stay current with the technology