We can define information technology as computer hardware and software used for processing and storing information, and communications technology used for transmitting information.
Think of IT as capturing, manipulating, presenting, communicating, using and transforming data into information.
The information systems area in most organizations has the responsibility of managing the firm's IT assets:
hardware, software, networks, and information systems professionals. As the technologies grow, information system's responsibilities continue to evolve.
The smart manager sees IT as integral to business and wants to know all about the key elements and tradeoffs.
The idea is to make information technology a part of the organization, so that the organization is either more efficient, more effective, or both.
Decisions are typically made in business with some information that is fairly accurate, but not all the information is available to reduce decision risk to zero. Why?
The answer is cost, time, and uncertainty. First, there is a tradeoff between the cost of accumulating the information and the cost of making a decision error. Second, given more time more information could be gathered, so there is a tradeoff between the
Decision risk
is the risk of an error in decision makingn theory, with complete and accurate information, there is no risk at all in making decisions. At the other extreme, making a decision without any information or with inaccurate information is a gamble.
certain
is that when the amount of accurate information is high, decision makers tend to make better decisions. When the amount of accurate information is low, decision quality tends to be poor.
Experienced business people use information rules to simplify or quicken all types of tasks and decisions.
Business people try to accumulate information rules to shorten the time that they spend analyzing choices and to improve decision quality. Information rules should evolve over time, because the environment in which the decision maker operates is changing.
The supposed American education advantage
is that we stress creativity (the arts) and not rote -learning. Other countries like China and Japan have more rote-oriented learning systems. Americans have a kind of self-confidence that whatever our population lacks in math and science, we can make up
Digitization
is the process whereby music, video, data, words, pictures, etc. are turned into bits and bytes - combinations of 1s and 0s - that can be stored on a microprocessor, manipulated on a computer screen, or transmitted over fiber-optic cables and satellites.
World Wide Web and the Internet:
The Internet is a network of networks basically comprised of computers and cables that can deliver packets of information to anywhere in the world.
Fiber-optic cables
are strands of optically pure glass that are arranged in bundles. These cables can carry digitized packets of information over long distances at the speed of light. And, because the optical fibers are so thin, a cable has many fibers allowing much more to
Uploading
is a form of collaboration in the IT world. It allows each of us to become a producer rather than just a consumer. The systems are designed for users to produce, not just consume. An example of uploading is YouTube, where individuals can offer videos of s
long assumed that producing a product of complexity or substance
takes some kind of hierarchical organization or institution. The idea was that you needed top-down vertical integration (creating value vertically) to get complicated things produced and distributed around the world. Uploading allows an individual or smal
From one to many has been the typical business model,
in which one producer sells to many buyers (one produces and many buy). A new business model is that you involve your customers and supply chain partners in an ongoing conversation about every aspect of your business, from product conception and design, t
Outsourcing:
Any business activity that can be digitized can be sourced to the best, cheapest, most efficient, or smartest provider, anywhere in the world. Outsourcing is a whole new form of collaboration and horizontal value creation made possible by the PC, the Inte
Offshoring:
A company takes a factory that it is operating in a place such as the American mid-west, and moves the whole thing to another country. There, the plant produces the very same product with the very same processes.
Global Supply Chaining:
Supply chaining is a way of collaborating horizontally among suppliers, retailers, and customers to create value in the marketplace. It is easy with today's technology to reverse-engineer products and be able to make a copy in a short period of time. This
This is not only hard to do, but is also very hard to duplicate. Good supply chaining has to do two things:
(1) get the most reliable, low cost delivery system in place; and (2) coordinate disruption-prone supply with hard-to-predict demand. The shortening product life cycles of products makes getting these two things done all the more difficult.
Replacing inventory with information
is about using IT to get information from stores about what consumers are buying (styles, colors, etc.) back into the supply chain so that the best adjustments can be made sooner. In addition, accurate information about products in the supply chain allows
Searching - Google, etc.:
Never before in the history of the world have so many people had the ability to find and access so much information. With searching, we can find what we want, on our own, no matter how obscure. People can produce more obscure things and buyers can find th
The fall of the Soviet Empire:
This tipped the balance of power to those advocating democratic and free-market oriented economies across the world. Market oriented economies are governed more by the demands, interests, and goals of the people, instead of a top down system that rules by
Power and wealth will increasingly go to those individuals, companies, groups, and countries that can do the following:
1. That have good infrastructure to connect to information technology platforms.
2. That possess the education, skills, and culture to get their populations using, innovating, and collaborating from the platforms.
3. That have created good governance syst