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ISM 50 - Business Information Systems
Lecture 2
Instructor: John Musacchio
UC Santa Cruz
October 2, 2007
Reminder: Business Analysis Paper
Preferences Due today!
As a group, turn in 3 things:
- List of your proposed group members.
- List of companies you would like to study.
If you don’t have someone in mind to
work with, turn in the above 3 things as
an individual.
Another Reminder…
Assignment 1 is due Thursday.
Resume, and Cover Letter.
See class webpage for detailed
instructions.
Read:
Chapter 2 - Section I of O’Brien (reader pp 69-77) Cash Flow Handout on class webpage
Review: Business Analysis Paper
Go to class web page and click on business
paper in the announcements for detailed
guidelines.
Paper Should Have:
I dIndustry Profile P fil Company Profile Information Technology Leadership Market and Financial Performance Trajectory
Review: Citing Sources
Plagiarism is illegal and cheating and will
not be tolerated!!!
More than thirty words verbatim must be
cited.
Any facts or figures that are not your own
must be cited.
Ebay’s revenues in the US in 2002 were $1. billion [1]. [1] Ebay 2005 Annual Report.
Review: Citing Sources
“Semiconductors have found a place in virtually every electronic device in existence. This helps explain why the industry was able to reach $200 billion in sales before a slump brought the figure back down in 2001” [1].
You must cite your sources in the body of the text!!!!
END NOTE: [1] “Semiconductor Trends”,Silicon Valley Tech Week, August 9, 1999, page 81.
Reference to end note in the body of the text!
Review: Citing Sources
The easiest way to lose points on your
paper is to not cite sources!
Guide on the class website will help you
cite your sources correctly.l
Talk to the TA or Instructor if you have
questions.
Review: Suggested sources of Information Company website 10K report (This is the annual report public companies file with Security and Exchange Commission.)
Article Databases A database of articles from magazines like “Business Week” and economics journals. Find it at: http://library.ucsc.edu Click on “article database” on left mar inClick on article database” on left margin. Click on “LexisNexis Academic ” or try “Business Source Premier from Ebsco Host” Try this tonight! And let us know if you have problems on Thursday
Industry specific publications Books Good Magazines (The Economist) Consulting groups: Forrester, Gartner, …
STUDENT PRESENTATIONS
Two Students who previously volunteered
will give a talk now.
Each Student gives a 5 minute talk on aEach Student gives a 5 minute talk on a
news article they read, and says how it is
relevant to the class.
Where are we, and how did we get
here?
Let’s survey the history of IT over the
past few decades!
The History of IT from 1960-
IT Mgmt from 1960-
The author (Nolan) breaks down history
into 3 eras
Data Processing Era Micro EraMicro Era Network Era
A logical division, but not universal
Messerschmitt divides into 4 phases Centralized, Time shared, de-centralized, networked
The Data Processing Era (1960-1980)
By 1960 economy dominated by large, multi- divisional, hierarchical businesses Corporate Office Divisional operating units in different markets
Example: GE
Corporate p corporate office in Connecticut Lighting in Cleveland Locomotives in Erie …
Within each division many “functional departments” Accounting, Finance, Engineering, etc.
Lighting Power Locomotive
DP Era (1960-1980)
Technology Evolution
First - Stand Alone Mainframes Next – Dumb terminals attached to mainframe (“Time-Shared” Phase in Messerschmitt’s terminology)gy)
Data Processing Era (1960-1980)
The information resource manager was
known as theData Processing (DP)
manager.
Charged with supporting the businessg pp g Not with changing how the business was run
DP Era (1960-1980)
IS evolved from supporting lower
functions to higher level functions
Low:Low: Inventory Purchasing SchedulingInventory, Purchasing, Scheduling Medium: Productions Operations Management High: Corporate wide planning
DP Era (1960-1980) -- Annual Budgeting
Budgeting was an important function made easier by computers Accounting of Revenues, Expenditures, Assets, Liabilities Generate Profit and Loss Statement
B fBefore computers t Was difficult to do once a year
After computers, Could “close the books” more often Could break down profits and losses to each level of the corporate hierarchy
Capital Budgeting
Analyze return and risk of expenditures intended to generate revenue over multiple accounting periods Examples: New building, or factory
B fBefore computer t Calculations could become complicated
After computer
Very easy
Consequence: Every level of the organization could be held accountable for their ROI
Budgeting
Better budgeting and resulting accountability lead to consistent earnings growth.
Build up to Micro Era
1974 – Xerox PARC develops fist computer with a mouse. They don’t commercialize it!
1974 – Altair PC for hobbyists
1975 – Bill Gates and Paul Allen Found Microsoft
Build up to the Micro Era
1977 – Apple introduces a successful microcomputer
The Micro Era (1980-1995)
1981 – IBM introduces its PC!
Intel develops CPU Microsoft develops operating system
IBM PCs were rapidly adopted by the
commercial market.
The Micro Era (1980-1995)
PCs threatened the DP manager
Easier to manage one central mainframe than a PC on every employees desktop! Data not Centralized. ThTh e numbers on my PC are right, the ones on your PCb PC i ht th PC are wrong! Security Risks.
DP managers put restrictions on PCs Users defied them!
The Micro Era (1980-1995)
Users wanted the convenience of word processing, CAD, etc… Vendors marketed direct to the users instead of the DP managers. Example: Spreadsheers
Spreadsheet Example
VisiCalc (1979)
First Spreadsheet For Apple II computer
Lotus 1-2-3 (1983)
Mimicked VisiCalc For IBM PC
Excel (1985)
Microsoft Surpassed Lotus when Windows took off.
The network era
The network era permitted new ways of
doing business
Employees could check on their benefits with a web browser Cust mCustomers could s c uld “s lf s self-serve” themselves v ” th ms lv s In 1998, 70% of Cisco’s $800 million of service revenue was provided over Internet, by allowing customers to access their intranet. Wal-Mart used point of sale data to drive supplier replenishment (CRP)
The network era
Amazon sold books with minimal inventories. Levi Strauss used geo-demographic database to match supply and demand in each store …and many more examples!
Information Resource Management
Strategic realization
Information is the resource to be managed not justdata.
Need to get information into the hands of workers, so workers can be more productive.
Result: Organizational Performance
Improvement
The Network Era (1995 - ?) – Internet
Phenomenon
For IT manager -- Enormous challenge to
manage networks of thousands of
computers!
The Network Era (1995 - ?) – Internet
Phenomenon
“The Technology leader of Tomorrow must be a business leader with all of the management skills of any other senior executive…
The CIO has gone from being a corporate god in the 1980s to the chief blame taker in the 1990s when IT initiatives often have failed to deliver their promised productivity gains.” 1
(^1) Sifonis and Goldberg, “Changing Role of the CIO,” Information Week, March 24 1997
The Network Era (1995 - ?) – Internet
Phenomenon
In 1996 the CIO turnover rate was 17.7%! 1
Take Away: Managing IT in the Network Era is difficult, but if you do it right the rewards can be huge!
(^1) Deloite and Touche
Some Terminology from
Messerschmitt
Definitions
Anapplication
a software program that provides direct and specific value to a user or organization
Anetworked application
distributes programs across 2 or more computers which collaborate in realizing an application.
Definitions
Information Technology
the suite of technologies that manage the storage, communication, and manipulation of information.
Infrastucture
part of the information technology shared by many applications Hardware – computers and the network Software – operating system, middleware
Definitions
Middleware
software falling between the operating system and the application.
History of Computing
Centralized
A few big mainframes to automate business functions such as payroll and accounting
Time-Shared
Terminals added so many could access main frame
Decentralized
PCs on every desk
Networked
Applications could be geographically distributed
A Business is a System
- Some business basics while remembering the
importance of making a profit
Helps to remember and to tie together:
importance of making a profit.
- The understanding of business functions.
- The appreciation for the importance of
business processes.
Business as a system
A business is an organizational system where
economic resources (input) are transformed by
various organizational processes (processing)
into goods and services (output)into goods and services (output).
Information systems provide information
(feedback) on the operations of the system to
management for the direction and maintenance of
the system as it exchanges inputs and outputs
within its environment.
Important Things to
Understand
Two terms:
1) business functions
2) business processes
Will be frequently used throughout this course.
It would be a good idea to make absolutely sure
that you know what they are.
