Strategic Uses of Information Technology Lecture 7

Strategic Uses of Information Technology

Lecture 7

Today lecture summary

Use of the Internet by businesses set off a revolution in the use of IT, so that utilizing the Internet to conduct business became the strategic use of information technology.

The questions that remain are: Has the revolution ended, or Does an even larger revolution loom? Does IT still matter?, and What sorts of strategic uses are companies making?


Strategic roles of IT fall into one of three categories:

1. “working inward” (improving a firm’s internal processes and structure)

2. “working outward” (improving the firm’s products and relationships with customers) and

3. “working across” (improving its processes and relationships with its business partners)


Grainger, GE Power Systems, Wire Nova Scotia, The Shipping Industry, Cisco Systems and UPS Supply Chain Solutions, Semco, S. A., A Day in the Life of an E-lancer, General Mills and Land O’ Lakes, Sara Lee Bakery Group, and Dell Computer serve as examples of how companies are using information systems in strategic roles

Contents

Introduction History of Strategic Uses of IT Whither the Internet Revolution? The Cheap Revolution Episode Two: Profitability Strikes Back Does IT Still Matter?

Working Inward: Business-to-Employee Building an Intranet Fostering a Sense of Belonging

Introduction

Use of the Internet by businesses in mid/late ’90s set off a revolution in the use of IT Utilizing the Internet to conduct business became the

strategic use of IT Strategic = having a significant, long-term impact

on a firm’s growth, industry and $$

What now? Dot-com crash A larger revolution to come? Does IT still matter? What strategic uses are companies making of IT (esp.

the Internet)

IntroductionLast 20 Years – Strategic Uses of IT

1st edition Mid 1980s, hot topic = end user computing (working

inward) Help employees learn about PCs

2nd edition Late ’80s strategic use focused outward to gain

competitive advantage e.g. Merrill Lynch cash management account

Now considered ‘normal’ = competitive necessity Vs. competitive advantage

IntroductionLast 20 Years – Strategic Uses of IT cont. 3rd & 4th editions (1990s)

Strategic use attention turned inward to reengineering business processes

Intent = not to automate existing processes but to totally redesign how the enterprise operated

Good idea but many failed as they were ‘lay-off’ plans

Introduction of ERP systems was also aimed at internal operations, specifically providing single sources of data enterprise-wide

IntroductionLast 20 Years – Strategic Uses of IT cont. 3rd & 4th editions (1990s) cont.

Internet’s potential becoming evident Dot-coms = looked at its outward use to gain a

competitive advantage Most established firms initially used the Internet

technology internally, building intranets to improve company processes

Publishing e-formsAccompanying workflow processes

IntroductionLast 20 Years – Strategic Uses of IT cont.

5th edition (late ’90s)

Use of the Internet for business underway Bursting of the dot com bubble E-Business has become more reality based Integration of the Internet into how companies

work has proceeded


6th edition (early ’00s)

Theme = leveraging traditional operations by using the Internet to work more closely with others

Innovations of the dot-coms created competitive challenges for ‘bricks and mortar’ firms

– Their ‘strike back’ is essentially the theme for this 6th edition


7th edition (2005)

“Something has changed”

Especially with regards to the use of IT for competitive advantage


Some may question IT’s ability to give companies a competitive edge but it is absolutely necessary for competitive parity (necessity?)

Being used strategically:

InwardOutwardAcross

What Is the Internet?

A network of networks, joining many government, university and private computers together and providing an infrastructure for the use of E-mail, bulletin boards, file archives, hypertext documents, databases and other computational resources

The vast collection of computer networks which form and act as a single huge network for transport of data and messages across distances which can be anywhere from the same office to anywhere in the world.


Technically, the Internet is a global information system defined by three characteristics:

• A network composed of computers and other devices

that are logically linked together by a unique address

space based on the Internet Protocol


• A network where network devices are able to support

communications using TCP/IP (Transmission Control

Protocol/Internet Protocol) or other compatible protocols

• A network that provides high-level services layered on a

communication and network infrastructure


The largest network of networks in the world.

Uses TCP/IP protocols and packet switching .

Runs on any communications substrate.

Brief History of the Internet

1968 - DARPA (Defense Advanced Research Projects Agency)

contracts with BBN (Bolt, Beranek & Newman) to create ARPAnet

1970 - First five nodes: UCLA Stanford UC Santa Barbara U of Utah, and BBN

1974 - TCP specification by Vint Cerf 1984 – On January 1, the Internet with its 1000 hosts

converts en masse to using TCP/IP for its messaging

A Brief Summary of the Evolution of the Internet

1945 1995

Memex Conceived

1945

WWWCreated

1989

MosaicCreated

1993

A Mathematical

Theory of Communication

1948

Packet Switching Invented

1964

SiliconChip1958

First Vast ComputerNetwork

Envisioned1962

ARPANET1969

TCP/IPCreated

1972

InternetNamed

and Goes

TCP/IP1984

HypertextInvented

1965

Age ofeCommerce

Begins1995

The Creation of the Internet

The creation of the Internet solved the following challenges:

Basically inventing digital networking as we know it

Survivability of an infrastructure to send / receive high-speed electronic messages

Reliability of computer messaging

IntroductionWhither the Internet Revolution?

Internet frenzy peaked in 2000 Is the Information Revolution dead?

Not if history is any guide British Railway Revolution – mid 1800s 10 fold increase after the boom

During boom = great excitement and small companies flourished

After = glamour gone. Business became serious and full of hard work

Industry became orderly and profits began to reflect real returns

Connecting industries Race for space followed by the ‘real deal’

IntroductionWhither the Internet Revolution? cont.

We are now in a period where organizations are re-architecting themselves around Internet technologies Tearing down old structures as they go

Real gains will come when Internet technology adapts to organizations and people When the technology disappears and becomes part of

life It will be ‘quiet’ compared to frenzy of ’99/00 but many

think it will be a giant revolution

Major Internet Services

• E-mail:• Person-to-person messaging; document sharing

• Usenet newsgroups: • Discussion groups on electronic bulletin boards

Major Internet Services conti..

• LISTSERVs: • Discussion groups using e-mail mailing list servers

• Chatting and instant messaging:• Interactive conversations

Major Internet Services Conti..

• Telnet: Logging on to one computer system and

doing work on another

• FTP: Transferring files from computer to computer

• World Wide Web: Retrieving, formatting, and

displaying information (including text, audio,

graphics, and video) using hypertext links

The Internet and Business Value

The World Wide Web:

• HTTP (Hypertext Transfer Protocol): communications standard used to transfer pages on the Web.

• URL (Uniform Resource Locator)

• Web servers

Searching for information on the Web

• The Internet lowers search costs

• Search engines

• Intelligent agents and shopping bots

Internet Network Architecture

Figure 7-9

Intranets and Extranets

Intranets:

• An intranet is an internal organizational network that provides access to data across a business firm.

Extranets:

• Allow authorized vendors and customers to have limited access to its internal intranet

IntroductionThe Cheap Revolution

CIOs are shifting from buying expensive proprietary products to buying cheap generic products

“Cheap Tech”

Cost savings are compelling

Google = runs on 100,000 cheap servers

One breaks = discards

Avoids expensive service contracts and in-house staff

IntroductionThe Cheap Revolution

“Dellification”

Moved from selling PCs to also selling servers, printers, storage devices….

“Cheap” is occurring elsewhere:

Labor – outsourcing to other countries Film production – camcorders etc. Software – Linux Vs. Microsoft Telecommunications – Voice-over-IP…

Revolution of Social Media

Social media refers to online services that allow people to publicly create, share, and discuss information

Social media services include, but are not limited to:• Blogs

• Social networks such as Facebook and MySpace

Social Media Conti

• Video and photo sharing sites such as YouTube and Flickr

• Microblogging services such as Twitter

• Social bookmarking services such as Digg and Delicious

Why use Social Media?

Social media is becoming many people’s primary source of news, opinion, and entertainment

•Social media is now ubiquitous -- widespread blogging, social networks, video sharing sites, and opportunities to comment on and rate online content

•Power of personal connections -- Research shows people are more compelled to act on information that’s transmitted through personal ties

Why use Social Media?

•Relevancy for government – We can use social media to share timely government information with the people who need it

•Engaging citizens to improve government -- Social media allows people to engage, to provide input for improving government services, and be part of the democratic process

Making Government Easy with Social Media

Review of USA.gov & GobiernoUSA.gov Social Media Strategy

Examples of how we’re using social media

Social Media Strategy Development Social Media Preferences

We reviewed analytics and surveyed social media users, which showed:

•Interested in accessing government information via social media

•Credibility of government information on social media is critical

•Interested in having conversations with the government

Social Media Strategy Development Social Media Preferences conti..

•Interested in a variety of government information, including:

Emergency alerts

Social Security

Other government benefits

•Relevant and timely content is critical – the technology used to deliver it is secondary

Social Media Strategy DevelopmentSocial Media Best Practices

We examined a variety of social media initiatives and identified these best practices:

Seek or create user interfaces that foster interaction:

Interaction should be easy and intuitive

Use branding elements to make it clear that users are interacting with an official source


Engage constituents:

Answer constituent comments in a friendly and personal manner Establish clear guidelines for engagement, and empower government reps to interact with constituents


Solicit feedback and encourage sharing:

Whenever possible, invite opinions and experiences from constituents to stimulate dialogue

Provide links or buttons to share content and encourage users to do so with clear calls to action


Provide relevant and timely content:

Use social media to listen to conversations and allow constituents to identify topics of interest

Use existing content assets to initiate timely discussions


Dedicate resources:

Dedicate resources to own the conversation and optimize the program based on feedback

Planning a Social Media Strategy

We used a strategic approach to address constituents via social media, thinking about our audience and objectives before choosing a technology

1.Define objectives:

Conducted stakeholder interviews to learn about our own motivations to use social media and learn what we wanted to get out of it

Planning a Social Media Strategy conti..

2. Perform audience research:

Surveyed users and analyzed traffic to learn about constituents’ objectives and needs

3. Identify best practices: Looked at other organizations to see how they use

social media to achieve objectives

Planning a Social Media Strategy conti..

4. Develop a long term strategy:

Developed a scalable strategy that would accomplish our objectives, independent of technology, while fulfilling constituent needs

Our Social Media Objectives

An extensive internal review process revealed the need to use social media to:

Put a human face on government Establish USA.gov & GobiernoUSA.gov as approachable

sources of trusted information Create new channels to distribute existing content, news,

and information

Our Social Media Objectives conti

Spread information virally

Interact directly with constituents

Encourage public engagement with government

Summary

Introduction History of Strategic Uses of IT Whither the Internet Revolution? The Cheap Revolution Social media

Documents

Strategic Uses of Information Technology Lecture 7