Chapter 12 (Abbreviated) Information System Trends

1. Chapter 12 (Abbreviated)Information System Trends What managers need to know about the emerging and enduring trends in Information Systems management Chapter 12 Abbreviated (36)

2. The Hype Cycle • Technology Trigger: When a new technology becomes available • Peak of Inflated Expectations: When over enthusiasm and unrealistic expectations fuel rapid adoption • Through of disillusionment: When failures become public • Slope of Enlightenment: when the true benefits of the technology become apparent to the organizations • Plateau of Productivity: the phase when the benefits and risks of the technology become widely understood and accepted Chapter 12 Abbreviated (36)

3. The Hype Cycle -2005 Chapter 12 Abbreviated (36)

4. The Hype Cycle - 2010 Chapter 12 Abbreviated (36)

5. Enterprise Systems • In the early 1990s developers realized the limitations of the functional approach • This led to a class of standardized software applications that would enable and support integrated business processes • These applications are known as Enterprise Systems (ESs) Chapter 12 Abbreviated (36)

6. Enterprise Systems • Provide native integration • Attempt to support all components of the firm’s IT infrastructure. • Defining characteristics: • Modular • Integrated • Software applications • Span all organizational functions • Rely on one database at the core. • Custom developed or purchased off-the-shelf Chapter 12 Abbreviated (36)

7. Characteristics of ESs • Modularity • Enables the organization to decide which functionalities to enable and which ones not to • Allows for flexibility at the design stage • No need to pay for unnecessary components Chapter 12 Abbreviated (36)

8. Characteristics of ESs • Application Integration: • Events in one module automatically trigger events in one or more separate modules • Data Integration • Data is stored in onecentral database Chapter 12 Abbreviated (36)

9. Characteristics of ESs • Configurable • Enterprise Systems are parameterized • Firms choose among a predefined set of configuration options during the implementation of the application • The firm can extend the capabilities of the standard application by creating “bolt-on modules” • This customization process further tailors the ES to the specific needs of the organization Chapter 12 Abbreviated (36)

10. Advantages of Enterprise Systems • Efficiency • ESs are able to rein in complex, generally hard-to-mange and support legacy IT infrastructures • Potential to reduce direct costs • Example: No redundant data entry • Potential to reduce indirect costs by streamlining business processes and operations Chapter 12 Abbreviated (36)

11. Advantages of Enterprise Systems • Responsiveness • ESs can deliver improvements in the firm’s ability to respond to customers and market demands • Knowledge Infusion • The application embeds the state of the art in industry practice • ES can be used to update obsolete business processes within the firm Chapter 12 Abbreviated (36)

12. Advantages of Enterprise Systems • Adaptability • Offer a degree of customizability rarely offered by off-the-shelf applications • Achieved through the use of configuration tables and bolt-on functionality Chapter 12 Abbreviated (36)

13. Limitations of Enterprise Systems • Standardization and Flexibility • Organizations are encouraged to implement as close to a standard version of the software as possible. • So called “Vanilla” implementation ensure that firms take advantage of the economies of scale created by the vendor • But flexibility is sacrificed by this approach • ESs are often referred to as software concrete • Much of the adaptability only occurs during the implementation process. • Once set, ESs are difficult to change Chapter 12 Abbreviated (36)

14. Limitations of Enterprise Systems • Limitations of best practice software • It will force the firm to adapt • It is unclear how “best practices” are defined • The “best” practice may differ for different firms • Its not enough to implement a software program to enact a new practice • A firm’s own best practices may not be supported by the new ES Chapter 12 Abbreviated (36)

15. Limitations of Enterprise Systems • Strategic Clash • A firm will have to choose amongst the set of business processes supported by the software • What if one of your unique and differentiating practices is not supported by the ES? Chapter 12 Abbreviated (36)

16. Supply Chain Management • The set of coordinated entities that contribute to move a product or service from its production to its consumption • Upstream Supply Chain • Downstream Supply Chain Chapter 12 Abbreviated (36)

17. Modern Supply Chain Management • Tight linkages between upstream (i.e., suppliers) and downstream firms (i.e., customers) • Inter-organizational systems increasingly supported by the Internet • Integration with enterprise systems • Increasing attention to IT-enabled supply chain management Chapter 12 Abbreviated (36)

18. Supply Chain Management Chapter 12 Abbreviated (36)

19. Supply Chain Management Trends • Radiofrequency Identification (RFID) • A new frontier in SCM: • No line of sight requirements • Embedding potential • Writing capabilities • Storage capacity • Speed up the receiving process • Improve monitoring and control of inventories Chapter 12 Abbreviated (36)

20. Knowledge Management “All the value of this company is in its people. If you burned down all out plants, and we just kept out people and out information files, we should soon be as strong as ever.” --Thomas Watson, the CEO of IBM Chapter 12 Abbreviated (36)

21. Knowledge • Knowing What: Based on the ability to collect, categorize, and assimilate information • Knowing How: Ability to recognize or create the sequence of steps that are needed to complete a task • Knowing Why: Based on understanding of cause-effect relationships Chapter 12 Abbreviated (36)

22. Knowledge • Categories of Knowledge • Explicit Knowledge • Can be articulated • Codified • Transferred with relative ease. • Tacit Knowledge • The type of knowledge that individuals possess but find difficult to articulate Chapter 12 Abbreviated (36)

23. Knowledge Management • Set of activities and processes used to: • Create • Codify • Disseminate knowledge in the organization • IT is a key component and enabler • Aspects of knowledge management: • Creating • Capturing • Storing • Disseminating Chapter 12 Abbreviated (36)

24. Creating Knowledge • Knowledge creation is the first stage in knowledge management: • Generate new information • Devise solutions to existing problems • Identify new explanations for events Chapter 12 Abbreviated (36)

25. Capturing and Storing Knowledge • Enables the organization to: • Codify new knowledge • Maintain an organizational memory • Content Management Systems (CMSs): • Applications used to capture and store knowledge • A knowledge repository is a central location and search point for relevant knowledge Chapter 12 Abbreviated (36)

26. Disseminating Knowledge • The last phase in a knowledge management initiative • When knowledge is formatted and easily accessible, dramatic improvements in effectiveness and efficiency can be achieved. Chapter 12 Abbreviated (36)

27. Business Intelligence • The ability to gather and make sense of information about your business • A set of techniques • Processes • Technologies • Designed to enable managers to: • Gain superior insight about the organization • Gain superior understanding of the business • Make better decisions Chapter 12 Abbreviated (36)

28. Business Intelligence Chapter 12 Abbreviated (36)

29. Components of BI • Data Warehouse: • A data repository • Collects and consolidates data • Multiple sources • Characteristics: • Large in size • Large in scope • Enabling data integration • Designed for analytics Chapter 12 Abbreviated (36)

30. Components of BI • Data Mart: • A scaled-down version of a data warehouse • Focuses on the needs of a specific audience • Smaller in scope, thus easier to build • Online Analytical Processing (OLAP): • User-driven • Enables a knowledge worker to easily and selectively extract and view data from analytical databases Chapter 12 Abbreviated (36)

31. Components of BI • Data Mining: • The process of automatically discovering non-obvious relationships in large databases. • Used to analyze historical information • Machine-driven • Possible Patterns: • Associations • Sequences • Classifications • Forecasting Chapter 12 Abbreviated (36)

32. Customer Relationship Management • CRM is a strategic initiative, not a technology • CRM relies on transactional data and is designed to help the firm learn about customers • Designed to use data to make inferences about customer: • Behaviors • Needs • The objective is to create value for the firm by optimizing the relationship with each customer Chapter 12 Abbreviated (36)

33. CRM Infrastructure Chapter 12 Abbreviated (36)

34. The limitations of CRM • CRM is firm centric • Only relies on transactional and behavioral data pertaining to the interactions of the customer with the firm • Limited predictive ability • Some events are unforeseeable and only the customer knows about their occurrence Chapter 12 Abbreviated (36)

35. The Web 2.0 Revolution, Social Media, and Industry Disruptors • social media The online platforms and tools that people use to share opinions, experiences, insights, perceptions, and various media, including photos, videos, and music, with each other • disruptors Companies that introduce a significant change in their industries, thus causing a disruption in normal business operations Chapter 12 Abbreviated (36)

36. Chapter 12 Abbreviated (36)

37. Social Media • Social Media Makes History Chapter 12 Abbreviated (36)