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Uday S. Karmarkar Times Mirror Professor of Strategy

CONVEGNO E&M 2003 L’ARABA FENICE: ECONOMIA DIGITALE ALLA PROVA DEI FATTI Esempi concreti di successo 12 Marzo 2003 ; Aula Magna Bocconi. The Impact of Information Technologies on Business Practice, and the Economy. Uday S. Karmarkar Times Mirror Professor of Strategy

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Uday S. Karmarkar Times Mirror Professor of Strategy

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  1. CONVEGNO E&M 2003L’ARABA FENICE: ECONOMIA DIGITALE ALLA PROVA DEI FATTIEsempi concreti di successo12 Marzo 2003; Aula Magna Bocconi The Impact of Information Technologies on Business Practice, and the Economy Uday S. Karmarkar Times Mirror Professor of Strategy Director, Center for Management in the Information Economy The Anderson School, UCLA

  2. Historical Shift to Services • Excluding agriculture, the service sector in the US is now 80% of the total economy (in GNP terms) • In Italy it is already over 65% of the economy, excluding agriculture • Now: a new shift is occurring..

  3. The Information Economy • “From atoms to bits..” • The information sector in the US is over 60% of GNP and increasing • Includes info products and services • All developed economies will exhibit this pattern

  4. Sectors of the Economy Delivery Form Products Services Machines, Chemicals Automotive Fashion Goods Consumer Products Tourism, Retail Transportation Construction Health Care Material End product Books, Magazines Newspapers Film, Music Software, Games Financial Services Radio, TV Telecommunication Legal, Consulting Information

  5. The US today and the Future Products Services 41% 11% 30% Material 50% 9% 59% Information 20% 80%

  6. Management Imperatives • Improve management productivity • Manage knowledge and information • Information systems are the only means for leveraging management productivity and knowledge

  7. An Information Perspective • What is changing in terms of the information component of supply chains and services? • Which changes affect your firm and industry? • What must be done in response?

  8. Information Management • The old data processing factory was centralized • Then information processing moved to the worker’s desk • Soon one part will move off the desk to the worker’s person • And the other, back to the network

  9. What is the CIO’s job • It used to be to a staff job, to run the IT back room • CIO’s could move to any company • Today the CIO must be a line manager, understanding the core of the business • And also a visionary and strategist?

  10. Company Facades • A bank’s face was its building • Today, the bank is also a web-site • The face of a product was the package and its design • The package is not going to be enough for the future

  11. Sector Changes • Material: manufacturing and physical services • De-integration and virtual firms • Information products and services • The consequences of digitization and convergence

  12. Chip Customers OEM Customers Manufacturer (Sanmina etc.) Chip Foundry (e.g. TSMC) Distributor (Arrow) Manufacturing:Virtual Companies Design Win Order OEM (Cisco, Apple, etc.) Chip Design (Altera, MIPS) Design, Order Order Ship Ship Agreement Order Order Order Ship Ship Ship

  13. OEM Customers Chip Customers Manufacturer (Sanmina etc.) Chip Foundry (e.g. TSMC) Distributor (Arrow) Material Flows OEM (Cisco, Apple, etc.) Chip Design (Altera, MIPS) Ship Ship Ship Ship Ship

  14. Service Sector • Like manufacturing in the 70’s? • Automation • Out-sourcing and virtualization • Off-shore sourcing and global competition (low cost logistics) • And… self service (shift to the consumer)

  15. Socio-Economic Challenge • Migration of manufacturing • Migration of value • Migration of jobs • Positioning in a global service economy • Avoiding the “concierge” economy • Leveraging information and knowledge

  16. Outstanding Questions • How are ICT trends affecting your firm and industry sector? • How are you handling information and knowledge assets? • Who will be the winners and losers? • What big shifts do you see ahead? • What are you doing to address these with technology, training?

  17. Thank You

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