ISS Module 2
Categorizing Ventures by Transaction Type
1) Business-to-Consumer (B2C) 2) Business-to-Business (B2B) 3) Consumer-to-Consumer (C2C) 4) Consumer-to-Business (C2B) 5) eGovernment
NJIT Strategies
1) Recruit stellar and diverse talents 2) Provide excellent research support 3) Provide excellent instructional support
IOT
(Internet of Things) refers to a network of physical objects of things that are embedded with electronics, sensors, software, and network creativity. These physical objects can exchange data with each other
Digital Business Modeling
1) A business model is an abstraction that captures the firm's concept and value proposition while also conveying what market opportunity the company is pursuing, what product or service it offers, and what strategy it will follow to seek a dominant position 2) Business model tells us who the firm's customer is, what the firm does for its customers, how it does it, and how it is going to be compensated for what it does 3) Digital Business modeling is about depicting how a firm conducts business using digital technologies
How to survive if you are losing?
1) Become compatible with the dominant player, thus being able to connect to the dominant network and tap into its value: Users can save files in apple pages in .doc and keynote in .ppt format 2) Find a niche that is different enough from the broader market and big enough to sustain the firm. EG: apple macs are better products for graphic designers The dominant network sponsor may react by trying to either block or limit compatibility. It may also try to take over the available market niches. Its ability to do so will depend on the characteristics of the market it competes in and the demand for product variety that characterizes it
The internet of things
1) Commoditization and drastic price decline of sensors brought about by the smartphone Emergence and consolidation of the cloud computing architecture Based on reliable internet networking IoT devices appear powerful by off-loading computation to cloud Smart IoT bridges physical world with cloud computing services offering new product functionalities and determining new opportunities for value creation
Critical Success Factors
1) Critical success factors are defined as the limited number of areas, typically three to six, that executives must effectively manage to ensure that the firm will survive and thrive 2) The CSF methodology asks that you identify what the firm must do right (not what the IS department must do right) to ensure the ongoing success of the organization 3) With the CSFs identified, it becomes easier to think about the role of IS in achieving them
Information systems vision
1) Define the role that IS should play in the organization 2) Some organizations' successes depends heavily on the ability to introduce IT innovations and they must always look for IT applications that make it competitive 3) For organizations in more mature and less IT- intensive industries, being cutting edge is less important
Crowdsourcing
1) Distributed human intelligence tasking: This approach is used for tasks where human intelligence is required to process data or information instead of computers eg: labeling training data for machine learning tasks 2) Broadcast search: This focuses on finding a single specialist, generally outside the field of expertise of the organization 3) Peet-vetted created production: this is adapted for ideation problems where an organization resorts to the crowd for supporting the creative phase and receives multiple design proposals eg: Amazon mechanical turk as a platform for crowd sourcing
NJIT Mission
1) Education 2) Research 3) Economic Development 4) Engagement
Information systems guideline 2
1) Guidelines enable the firm to achieve its IS vision this set of guidelines also referred to as IS architecture, identifies the principles that the firm will follow when using/managing IS resources 2) The firm executives have a vision for business to achieve. Working partnerships with IS professionals, they will establish a blueprint that will enable communication, establish responsibility, and guide future decision making
Economic Characteristics of Information
1) Information Has High Production Costs 2) Information Has Negligible Replication Costs 3) The Information Is Not the Carrier 4) Information Has Negligible Distribution Costs 5) Costs Are Sunk 6) Information Has No Natural Capacity Limits 7) Information Is Not Consumed by Use 8) Information Goods Are Experience Goods
Internet
1) Internet is a "network of networks" 2) The Internet is broadly defined as a collection of networked computers that can "talk to one another" the Internet is an infrastructure upon which services—such as e-mail, the web, instant messaging (IM), and many others—are delivered 3) The Internet can connect any device based on the digital computer architecture (e.g., laptops, smartphones, face-recognition digital camera)
Internet Services: Distributed Ownership
1) Internet is publicly accessible meaning that no single entity owns it, regulates its use, or otherwise controls it 2) Different portions of the internet (different networks connected to other networks) are owned by different entities - literally millions of them 3) -> distributed ownership by limited regulation, fostering experimentation, and ensuring widespread access led to significant growth
Digital Innovation
1) Is implying digital technologies by existing organizations to create new and improved products, processes or services, generally to extend or reinvent the firm's existing value proposition like ATMs for cash withdrawal 2) Digital Innovation's focus is on a product, service, or process, the scope is limited and the objective is clear 3) are not a one-time investment. They are characterized by recurrent changes to participate and and react to market dynamics
Digital Transformation
1) Is the application and exploitation of digital technology to radically rethink organizational business and operational models 2) Involves rethinking the company's value proposition, not just its operations. A digital company innovates to enhance products or services 3) Apple started with Ipods/itunes (digital innovation) then music subscription apple music (digital transformation) 4) Emphasis on embracing digital relationships with customers through digitally enhanced products or services
Strategic Impact Grid
1) Main advantage is its ability to enable simultaneous evaluation of the firm's current and future IS needs Current Need for Reliable Information Systems: focuses on current day-to-day operations and the functionalities of the existing systems Future Needs for New Information System Functionalities: forward looking dimension that is concerned with the strategic role that new IT capabilities play for the organization
Sustaining Technologies
1) Maintain or Rejuvenate the current rate of performance improvement 2) Extend the useful life of the product as the market demands further and further improvement -> it will therefore be a good candidate to replace a previous generation because it offers the same set of attributes, but it yields superior performance Capacity of car batteries get better until the capacity gain becomes marginal
Dominant Business Models for Digital Business
1) Online Retailing 2) Infomediaries 3) Content Providers 4) Social Networking 5) Digital Platform 6) Marketplaces 7) Cloud Services Providers
Dominant Revenue Models for Digital Business
1) Pay for Service 2) Subscription 3) Advertisement Support 4) Affiliate 5) Freemium 6) In-App Purchasing
Creator Economy
1) Pervasive technology enables talented individuals with minimal IT skills to launch their independent venture and become digital entrepreneurs in the creator economy, e.g.: youtubers a direct digital relationship to a global market of potential customers Kevin Kelly's 1000 ture fans strategy 2) Different from gig economy where a solopreneur contributes such as a ride on uber and is compensated by the aggregator that manages the marketplace in which those services are provided 3) No direct relationship or loyal between the customer ordering the food and the deliveroos rider who delivers it
Advantages of the Planning Process
1) Plans Enable Communication 2) Plans Enable Unity of Purpose 3) Plans Simplify Decision Making over Time
IT capabilities that make physical processes virtualizable
1) Representation is the capability of IT to effectively simulate actors, objects, their properties and characteristics, and the manner in which users interact with them 2) Reach is the capability of IT to overcome both time and space constraints. In essence, it allows the flexible participation of users in processes. 3) Monitoring and identification is the capability of IT to authenticate process participants and objects and track their activity
The Strategic Information Systems Planning Process
1) Strategic business planning 2) Information systems assessment 3) Information systems vision 4) Information systems guidelines 5) Strategic initiatives
Information systems assessment IMPORTANT
1) The IS resource assessment takes an inventory of the IT resources the firm has an evaluates them on how well they meet business needs 2) The goal is to understand what resources are available and whether they satisfy organizational objectives Technical resources; hardware, software, and networking components that make up the firm's IT infrastructure Data and information resources: databases and other information repositories Human resources: IS professionals and the user community (including general and functional managers as well as end users)
What role of IS should be for the firm?
1) The IS vision is a concise statement that captures what the planning team believes should be the role of information systems resources in the organization. It provides an articulation of the ideal state the firm should strive for in its use and management of IS resources 2) The information systems vision must be aligned with and reflect the firm's business strategy and, as a consequence, will be unique and highly specific to your company 3) How to decide what the role of information systems in your organization: critical success factors (CSF) methodology strategic impact grid
Internet Services: Open Standards (IMPORTANT)
1) The internet relies on open technology standards and protocols. A protocol is an agreed-upon set of rules or conventions governing communications among the elements of a network 2) To communicate, network nodes need to follow an agreed-upon set of rules
Information system SWOT
1) The planning team must now review how well equipped the firm is to achieve their vision in accordance with stated guidelines 2) It consists of strengths, weakness, opportunities, and threats (SWOT) analysis focused on the firm's current IS resources and capabilities 3) Armed with SWOT analysis, the IS vision, and the IS guidelines, the team develops an action plan and proposes tangible initiatives
How to recognize a tippy market
1) The presence and strength of economies of scale. Strong economies of scale, whether traditional economies of scale or network effects, provide an advantage to larger firms 2) The variety of the customer needs. Customer demand for variety creates the potential for the development of distinct market niches that the dominant player may be unable to fulfill.
TCP/IP Protocol
1) Transmission control protocol - creating channels of communications by making one message, or one movie into smaller packets for delivery 2) Internet protocol - addressing and routing each packet to destination Nobody owns the TCP/IP protocol; it is an open and free standard, not a propriety
Wearable Devices
1) Wearable devices are smart clothing items or accessories worn by individuals 2) Just like IoT objects, wearable look and behave just like their "dumb" counterparts 3) Wearable represent an important subset of IoT, but their peculiarity is that they are physically worn by people
Implications of Disruptive Technology Differential Rates of Improvements
1) a disruptive technology begins with performance that is well below the needs of the firm's mainstream customers 2) you should estimate whether, in the foreseeable future, the disruptive technology will catch up to market needs on the critical performance dimensions
The purpose of strategic information system planning All the 5 stages of strategic information systems planning process
1) general and functional managers need to be involved in decisions making that affects the organization's investment in, and use of, IS and IT resources 2) must understand the planning process, its purpose, and the type of decisions to be made as it unfolds 3) The planning process must occur as a partnership among those with technical skills, the information systems group, and general and functional managers 4) The planning process has a number of objectives, chief among them that of clarifying how the firm intends to use and manage information systems resources to fulfill its strategic objectives. 5) The planning process requires discussion, clarification, negotiation, and the achievement of a mutual understanding
Digital Entrepreneurship
1) is creation of new economic activities embodied in or enabled by digital technology EG: uber created ride-sharing market 2) Is a from of digital innovation that is generally enacted by a new venture created to pursue it term-78 3) Pervasive technology enables talented individuals with minimal IT skills to lauch their independent venture and become digital entrepreneurs in the creator economy
Business Model Canvas
1. Customer Segments 2. Value Propositions 3. Channels 4. Customer Relationships 5. Revenue Streams 6. Key Resources 7. Key Activities 8. Key Partnerships 9. Cost Structure
Digital Resources and Algorithmic/API Economy
10 Digital entrepreneurs are identifying components that are general and widely used across applications, like payments 2) They then focus on building world-class digital resources and making them available via API, for a free, to firms who use them in the innovative digital products they create 3) Instacart app uses AWS for storage, stripe for payment, twilio for messaging between shopper and customer
Process Virtualization Theory
Sensory requirements Relationships requirements Synchronism Requirements Identification and control requirements
Attention Challenges
A byproduct of the unprecedented availability of information is the increasing difficulty people encounter in keeping up with it People's time and attention is perhaps the scarcest resource an organization has to deal with. The scarcity of attention leads to slow adoption rates for all but the most revolutionary of innovation
Strategic Alignment
A firm that has been able to achieve a high degree of fi t and consonance between the priorities and activities of the IS function and the strategic direction of the firm has achieved strategic alignment Alignment has a direct impact on firm performance, and alignment is perennially on the top- 10 list of CIO priorities Strategic alignment is very difficult to achieve and maintain, particularly in those highly competitive environments where opportunities arise and fade quickly, and strategic priorities change constantly. Thus ensuring a high degree of strategic IS alignment requires as much improvisation as careful planning
Computing Platform
A software foundation on which other software is built: operating system
Theory of Disruptive Innovations
A theory that explains how some types of innovations can blindside managers, with devastating effects on their organizations. It is best understood by first drawing a distinction between sustaining and disruptive technologies.
Herbert Simon
A wealth of information creates a poverty of attention
Advertisement Support IMPORTANT
Advertisement Support: The firm then "sells access to its audience" to interested advertisers.
Digital Platform
An evolving sociotechnical system that exposeés resources and a design architecture that enable digital innovation and the competitive actions by other firms/developers example: Apple's IOS platform enables access to digital resources like GPS, camera on iPhone, and apple produces guidelines for rules for inclusion in the appstore
Whom do we blame if an IT initiative fails?
Manager Assign a business executive to be accountable for every IT project; monitor business metrics Consequences The business value of systems is never realized
NJIT CSF
CSF1: More tuition revenue CSF2: more funding revenue from research grants CSF3: More high impact research CSF4: More promising scholars (faculty and students) CSF5: More industry and local, state, and federal governmental collaborations
Disruptive Technologies
Cannot be used in products aimed at the mainstream market, because they are inferior with respect to the critical performance dimensions valued by the mainstream customers It offers two advantages: a different set of performance characteristics: thumb drives are light weight, plug and play A high rate of performance improvement on the critical performance dimensions
Plans Enable Unity of Purpose
Clear strategy and goals lead to concerted efforts from the organizational units and employees. The IS plan serves as a contract, wherein the objectives of IS deployment are specified and clear responsibilities are agreed upon
Objectives of the information systems guidelines
Communication Identify Responsibilities Long-range decision support
Plans enable communication
Communication is critical since individuals typically have different objectives and priorities Important: It is critical that consultants serve as members of the planning team rather than as delegates of the firm
Digital Marketplace
Communities of buyer and sellers who tract via digital technologies Three main objectives 1) They exercise control over products and services that can be listed by sellers 2) They function as enables of trust 3) They facilitate the discovery of products and services by providing resources for sellers to improve the visibility of their products and by direct actions to curate and organize product listings
Information system vision
Consists of a concise statement that captures what the role of IS resources in the firm
Information systems assessment
Consists of assessing firm's current IS resources on how well they fulfill the needs of the firm
Positive Feedback
Defined as that self- reinforcing mechanism by which the strong gets stronger and the weak gets weaker. It is a well- known economic phenomenon at the heart, for example, of economies of scale Sets in motion a virtuous cycle, benefiting the larger firm, and a vicious cycle, penalizing the smaller one. Thus the stronger firm gets stronger and continues to grow while the weaker firm gets increasingly weaker
Electronic Business
Defined as the use of internet technologies and other advanced IT to enable business processes and operations
Strategic business planning
Develops an organization's mission, future direction, performance targets, and strategy
Channel Conflict
Difficulty to moving distribution from traditional channel to online direct channel. It was easy for Dell which has no distributors for Compaq.
Introduction
Discussing the Internet, the mobile platform, and digital resources as the modern infrastructure for commerce Focusing on the services they make available, the issues they engender, and the potential for new business models and digital transformations they engender
Social Networking
Firms that intermediate the online congregation of individuals, social groups or communities of interest.
Marketplaces
Firms that manage communities of buyers and sellers who transact via digital technologies.
Cloud Services Providers
Firms that offer digital technology resources or services via the Internet
Online Retailing
Firms that take control of inventory that they then resell at a profit.
Infomediaries
Firms that use digital technologies to provide specialized information services.
Digital Business
Electronic commerce and electronic business rely on the same set of enablers. The more general term digital business is now the norm in business organizations and the business press
Not all Markets tip
Example: The automotive GPS navigation market is not a tippy market. If you own a Garmin device to help you find your way and I purchase my own GPS navigation device, you don't stand to benefit in any way from my purchase: we both use the receiver independently to find our way Unless: the navigation device automatically uploaded the location and speed of each user to a database that computed the average speed of cars on different routes the more users the more accurate the directions of the fastest route will be
Execution How good do our IT services really need to be
Manager Decide which features for example enhanced reliability or response time are needed on the basis of their costs and benefits Consequences The company may pay for service options that, given its priorities aren't worth the costs
Content Providers
Firms that develop and publish new information or new materials.
Digital Platform 2
Firms that expose resources to enable digital innovation and competitive actions by other firms.
Cost Structure (Important)
Focuses on outflows of cash to partners and providers of resources
Customer Segments
For whom your firm is creating value
Long-tail straegies
Similar in concept to Pareto principle or the 80-20 rule (80% of your sales will come from 20% of your product catalog) However online retail might catch sales for obscure items in the long tail by using collaborative filtering or similar technologies
Turnaround Quadrant
IS are not considered mission critical for current operations. But the planning team believes that in the near future a new information systems or new functionalities of existing systems will be critical for the business's future viability and continued (or expected) success Banks
Support Quadrant
IS are not mission critical for current operations, and this state of affairs is not likely to change in the foreseeable future like a very small bakery, all you need to do is be connected to a bank for credit cards
The Mobile Platform
Increasingly the services available on the Internet are not accessed through a desktop computer, but through a mobile device—a smartphone, tablet, or IoT device This trend is leading to a transition from the web to apps was driven by the growth of the mobile platform and the two competing ecosystems: Apple iOS and Google Android IMPORTANT: For many people, particularly in the developing world, a smartphone represents their first (and only) digital computer and, unlike a desktop or laptop computer, almost every adult on the planet owns one
Information Has Negligible Distribution Costs
Information goods are therefore characterized by high fixed costs and very low marginal costs
strategic Business Planning
Information systems are enablers of business strategy and operations Effective information systems planning can only occur in concert with business planning 3) Unless the planning team has developed a clear understanding of the firm and what makes it successful, as well as a deep understanding of the business strategy and its future goals and objectives, planning for the use and management of information systems resources is an exercise in futility
Market Efficiency
Internet and related technologies reduced search costs and improved efficiency of markets. Empowering customers with the technologies they need to sift through large amounts of product and service data. eg: getting car pricing data from KBB before heading to a showroom would make car buying more efficient
Importance of Customer Interface
It becomes feasible to unbundle traditional products and services and bundle products that could never be brought together before having a direct relationship with the customer or owning the customer interface, may become critical People used to do all banking business with their local bank
Tipping Point
It represents the moment in the evolution of a market where one organization or technology reaches critical mass and goes onto dominate it
Which IT capabilities need companywide (IMPORTANT)
Manager Decide which IT capabilities should be provided centrally and which should be developed by individual businesses Consequences Excessive technical and process standardization limits the flexibility of business units, or frequent exceptions to the standards increase costs and limit business
Strategic Initiatives
Long- term proposals that identify new systems, projects or directions for the IS
Disruptive Innovation
Low-end market strat 1) Professional interchangeable cameras (expensive, heavy, best performance,) 2) Point and shoot cameras (cheaper, lighter) 3) Cameras on smartphones (readily available in smartphones, acceptable to very good performance) New Market Strat Uber created ride sharing market
How much should we spent on IT?
Management role Define strategic role that IT will play in the company and then determine the level of funding needed to achieve that objective Consequence Company fails to develop an IT platform that furthers its strategy, despite high IT spending
What security and privacy risks will we accept?
Manager Lead the decisions making on the trade-off between security and privacy on one hand and convenience on the other Consequence An overemphasis on security and privacy may inconvenience customers, employees, and suppliers; an underemphasize may make data vulnerable
Which business processes should receive our IT dollars?
Manager Make clear decisions about which IT initiatives will and will not be funded Consequences A lack of focus overwhelms the IT unit, which tries to deliver many projects that may have little companywide value or can't be implemented well simultaneously
Mobile Devices Characteristics Identifiability
Mobile devices uniquely identify their user. To access the data grid, both smartphones and tablets utilize the cellular network and use a subscriber identification mobile (SIM card). (Without SIM card, there is still a MAC address inside media access control for each IoT)
The Information Is Not the Carrier
Movies were carried first on VHS tapes and later on DVDs, now they can be streamed on Netflix
Network Properties
Network Effect Strength Network Clustering Disintermediation Risk Multihoming Potential
Disintermediation Risk
Network Effects are weaker when participants can easily transact outside of the network (disintermediate the network owner) for example, use expedia to search for hotels and then book directly with a hotel
Network Economics Implications
Network Effects, Not Just Network: Network effects and positive feedback create the precondition for winner-takes-all dynamics Threshold of significance: traditionally, the onset of the tipping point would take some time but particularly for digital products delivered over the Internet, the market can tip very rapidly. In these markets being the innovator and the first mover is critical Users Select a Network: customers will pick a network, not a product or a service provider (MAC vs Windows machine) Controlling the Network Provides Competitive Advantage The Importance of Mutual Exclusivity: there are costs associated with being a member of multiple networks. The steeper these costs, the more valuable it is to be able to control and retain ownership of the network
Two-Sided Networks
Networks that have two types of members, each creating value for other. 1) Users and suppliers of content/information 2) buyers and suppliers of goods Value of the network to one type of member depends on the number of members from the other side
Retaliation from incumbents
New entrants can face retaliation in different forms: Legal means, Legislative means, Hybrid offers and Heightened competition
Information Has No Natural Capacity Limits
Number of downloads of a song on iTunes
Obstacles New Technology Must replace all characteristics of the old one
Old technology goes away only when the new one has replaced all its relevant characteristics
Aggregators
Organizations that manage an integrated digital platform and a marketplace (e.g. apple is an aggregator through its IOS platform and app store) By control of the marketplace, it aggregates customer demand, thus attracting to its platform those supplier who want to capture such demand
Internet services: Web 2.0
Popularized in 2004, labels the second wave of innovation and evolution after the original internet innovation (1993-2001) Web 2.0 is characterized by: 1) Two-way conversations (e.g., readers leaving comments for a blog post) 2) Interactive user experience: with advanced web programming, websites dynamically respond to user behavior 3) User-generated content (e.g., online reviews, youtube videos, wikipedia) 4) Emergent structure (e.g., tag cloud on flickr- no longer active) Web 3.0: Semantic web (coded with metadata for browsers or app to better analyze)
Companies' Benefits of Network Effects
Positive feedback associates with traditional economies of scale typical exhaust itself before one firm can achieve market dominance, but this is not the case for network effects Positive feedback associated with network effects can play out, without limit, until one firm dominates the network and all others disappear. A situation typically referenced as "winner- take- all" dynamic The network effect is a powerful barrier to entry, protecting the winner from competitors
Network Effects
Positive feedback in network is also referenced as network effects, network externalities, or demand side economies of scale Network effects occur when a new node (new user) creates value for all the other other members of the network by making the network larger and thus more valuable Network effects create spillover effects that have an impact on other individuals: positive for those members of the growing network and negative for the members of the other ones
Classic Information Goods
Products that a customer purchases for the only purpose of gaining access to the information they contain: Movies Books Newspapers A simple test for recognizing information goods is to verify whether the product can be digitized (i.e., can be encoded into bits and stored in digital format). If so, the product is an information good
Assessment on NJIT IS/IT resources related to strategy to address the education mission
Provide excellent instructional support Instructional HW, SW, Data resources NJIT 1) Kaltura (stores faculty instructional multimedia) 2) Canvas (also stores course and student performance data) 3) Kepler Repository 4) Online proctoring
Key Partnership
Relationships the firm must be able to leverage
Information systems guideline
Represent statements on how the firm should use its technical and organizational IT resources
Richness
Represents the amount of information that can be transmitted, the degree to which the information can be tailored to individual needs, and the level of interactivity of the message
Reach
Represents the number of possible recipients of the message
BYOD
Serves as a guideline for IS/IT resources to acehieve the strategy for education mission: 1) Compatible devices 2) Security standards (eg WPA: wifi protected access; WEP: wired equivalent privacy) 3) Wired/wireless internet connection coverage 4) Availability of adapters for connecting to projectors in classroom 5) Device charging stations 6) Cloud computing needs (webmail, google slides, google docs)
Identify responsibilities
Serving a similar binding purpose as policy rules 1) Decisions that are in line with the guidelines are deemed appropriate 2) Decisions that are not in line with the guidelines are treated as exceptions and will need substation justification
Revenue Streams
Specify how the firm "monetizes" its value proposition
NJIT IS/IT SWOT
Strengths: Most wired university (at one point) Weaknesses: Not enough computer labs define minimum computer requirements Install power outlets and device charging stations Identify SaaS solutions for course related software needs Opportunities: Virtual is a trademark of NJIT from 90s. Use IS/IT to provide hybrid delivery mode to recruit out of state students Threats: Security is always an issue when students bring their devices Initiative: define security requirements (especially for older devices) Initiative: provide guests access separately, I.e. NJIT gest instead of signing the NJIT secure for guests Do these initiatives follow BYOD guidelines? Yes Evaluate them using CSF to see if they help with NJIT success
Key Activities
The actions that characterize the business model
Key Resources
The assets at the epicenter of the business model
The Strategic Impact Grid Quadrants
Support Quadrant Factory Quadrant Turnaround Quadrant Strategic Quadrant
Customer Relationships
Tangible an emotional connections the firm establishes with the customer
Internet Services: Multiplicity of Devices
The Internet is a digital network consisting of millions of smaller digital networks. Each of these smaller digital networks encompasses a collection of digital devices, called nodes Example: your home network
Smart Device Capabilities Monitoring
The ability of smart objects to detect and sense the physical world.
Smart Device Capabilities Autonomy
The combination of previous capabilities allows for autonomous product operations, enhancement and personalization, self-coordination of operation with other devices, and self-diagnostics
Factory Quadrant
The company currently has a technology infrastructure that enables the business to operate with the needed degree of efficiency and effectiveness NJIT, no need anything fancy
Synchronism Requiement
The degree to which the activities of a process need to occur in real time or with minimal delay; eg: shopping packaged goods vs fruits and vegetables
Identification and control requirements
The degree to which the process requirements the unique identification of all participants and the ability to influence or to exert control over their behavior: online proctoring
Information in networks
The fact that information has to rely on physical carrier has acted as as constraint, limiting its ability to behave according to its inherent characteristics Example: Travel agencies before the internetw when information is constrained by a carrier, such as the travel agent, it is not allowed to behave like information while information is not consumed by use and is cheap to reproduce and distribute, since it has to be delivered by a person, it has to follow the economics of the carrier—only one person can speak with the agent at a time
Affiliate IMPORTANT
The firm generates revenue from a third party by referring customer traffic to it. Youtubers linking to products on Amazon
Freemium IMPORTANT
The firm gives away its product or service for free and sells premium versions
Pay for service
The firm offers a product or a service for sale, and it is compensated like a traditional store or service provider
Subscription
The firm offers its product for time-based fee and customers pay for the right to access the content
In-app purchasing
The firm provides free apps or games that have premium content or feature for sale buying poke coins for pokemon go
Information Has High Production Costs
The first copy of an information good is very expensive to create in terms of time and money (e.g., this book)
Value in Sarcity
The heart of business strategy is about being unique in a positive way Example: the value of A diamond depends on its physical attributes. The price of a diamond is fairly precise function of its physical characteristics the value of diamondS is proportional to their rarity
Reintermediation
The internet created opportunities for new intermediaries to exist alongside their brick-and-mortar counterpart
Proposed Strategic Initiatives
The last component of the strategic information systems plan is the identification of strategic initiatives Strategic initiatives are long-term (three-to-five-year) proposals that identify new systems and new projects or new directions for the IS organization These initiatives need not be precisely articulated, but they do need to identify a set of future avenues for exploitation of the IS resources. They also must be tightly aligned with the information systems vision and the proposed role of IS in the organization
Sensory requirements
The need for process participants to experience a range of sensory stimuli to engage in the process eg: wine tasting
Smart Device Capabilities Control
The possibility to set product functions and personalize user experience either directly from the device interface or remotely through the internet, e.g. owner gives voice commands to siri to enter focus (do not disturb mode)
Disintermediation
The process by which a firm's distribution chain is shortened through the elimination of one or more intermediaries. Compaq sells its PC to customer directly getting rid of middle men
Electronic Commerce
The process of distributing, buying, selling, marketing, and servicing products and services over computer networks such as the internet. Focusing on the transactions with external entities)
Strategic and Operational Planning
The realm of strategy pertains to the decisions that an organization makes with respect to how it will develop and deploy its resources over time in an eff ort to achieve its long- range objectives As a consequence, the realm of strategic planning, is concerned with long- range decisions about resource development and deployment Conversely, operational decision making is concerned with local decisions in the present Focus on how the firm will build and deploy its IS resources in an effort to achieve its long- range business objectives
Multihoming Potential
The simultaneous participants of network nodes in multiple competing networks. E.G.: a user can be on both network and twitter at the same time
Channels
The specific physical or digital conduits or touch points, the firm utilizes to deliver value to its customers
Value Proposition (IMPORTANT)
The specific set, or bundle, of products and services that create value for customers Amazon Marketplace example
Network Effect Strength
The strength of positive feedback may vary by network and may vary over time for the same network
Negative Feedback
The strongest gets weaker and the weaker gets stronger Negative feedback typically characterizes economies of scale and takes effect when the dominant firm has reached a significant size After a certain size, economies of scale no longer reduce unit costs, and due to coordination costs and increasing overhead, further growth is hampered
Evangelist Effect or Viral Effect
The term evangelist effect describes the dynamic that the more users the more value for you and the incentive that current members of the network have to "spread the word" and convince others to join it. While the evangelist or viral effect generally co- occurs with the network effect, it serves to speed up users' adoption A similar dynamic has fueled the growth of many other applications you may use today: Facebook, Snap, Waze, GroupMe, WhatsApp, and the like.
Network Economics: Value in Plentitude
The very first copy of Instagram is valueless As more and more people download the app you begin to see significant value in it and you would consider more and more for it The value in a network is proportional to the number of connected nodes
Technology pushing the richness/reach frontier
The widespread adoption of internet and the services it makes available, these constraints are increasingly being lifted: Expedia vs a travel agent With virtual reality and the AI-powered chatpots, the trade off will likely disappear
Information Has Negligible Replication Costs
This is where information goods begin to differ drastically from physical goods: the second copy could be produced at a fraction of the cost (e.g., Word)
Network Clustering
Topology of a network decides its potential decides its potential for winner take all possibility Boston uber drives care about how many riders in boston only and boston uber riders care about how many drives in boston only, creating local network. Social media platforms do not have this problem, because user locations are not important. Instead, network size is important
Mobile Devices Characteristics Ubiquitity
Users of the device can access needed resources from (in theory) anywhere -> they are portable and connected
Online-to-Offline (OTO)
Using digital technoly to spur transactions in physical stores 1) Engaging online customers in physical retail space (amazon customers can return their items in whole foods) 2) running online channel as part of the brick-and-mortar operations in a highly integrated fission (try iPhone in stores but wait for promotion and buy online)
IS Weaknesses
What creates disadvantages for organization relative to others in their industry? Increased size of the company requires more investment
IS Strengths
What gives the organization advantages over others in their industry? Leadership position in online retailing
Information-Intensive Goods
While information is not exclusively what the customer seeks when purchasing the products or service, information is either one of their critical components or a necessary resource during their production process: beers and their supply chain The role that information plays could be at the periphery of the product or service (informational material about the features of a product, the brand) or could be embedded in the product itself as knowledge (R&D and product development) Products and services in today's economy are increasingly "augmented" by information services: car with android auto
Strategic Quadrant
outstanding IS operations and a relentless attention to information systems innovation are a must for companies in this quadrant
Information Goods Are Experience Goods
products or services that need to be tried (i.e., experienced) before their quality can be assessed
Smart Device Capabilities Optimization
a product or services performance enhancement enabled by monitor and control capabilities such as predictive diagnostics, service, and repairs Siri learns owners accent
Implications of Disruptive Technology Different Sets of Attributes Become Relevant
as the disruptive technology closes the gap on the primary performance metrics, the technology's other characteristics may become a source of positive differentiation
Data
defined as codified raw facts—things that have happened (e.g., a customer has lodged a complaint) are coded as letters and numbers and stored, increasingly, by way of digital devices
Information
defined as data in context. Data become information when they have been given meaning and can therefore be interpreted by individual users or machines
Mobile Devices Characteristics Context awareness
enabled by the fact that mobile devices can be geolocated. Software applications can then make use of the locationof the person carrying the device and infer the context in which the user is embedded at the time or in the vicinity to other geolocated entities
Pure Play
firms that have no stores and provide their services entirely through the Internet (e.g., Amazon.com)
Categorizing Ventures by Company Structure Brick and Mortar
firms that have physical operations and locations (i.e., stores) and don't provide their services exclusively through the Internet (e.g., General Electric)
Organizational Information Systems Guidelines
focus on the organizational components of the firm's information systems must address those decisions that pertain to human resources, the organization of the information systems function, reporting and hierarchical structures, and the like
Technical information systems guidelines
focus on the technical components of the firm's information systems must address future decisions pertaining to the hardware and software infrastructure, networking services, and the storage and protection of organizational data and information
Long-Range Decision Support
guidelines must be general enough to provide direction over a number of years. Yet it is crucial that they be actionable. Thus they need to be specific enough to clearly spell out what the firm should do and, as a consequence, what it should not do when it comes to the deployment of information systems resource
Human Resistance to Change
human inertia
Information Is Not Consumed by Use
it can be reused multiple times (e.g., a movie in a theater can be shown multiple times)
Tippy Market
one that is subject to strong positive feedback, such that the market will "tip" in a favor of the firm that is able to reach critical mass and dominate it
Categorizing Ventures by Company Structure Bricks and Clicks
organizations that have hybrid operations independent operation (e.g., Barnes & Noble) integrated model (e.g., Alibaba)
Communication
simplify decision making and ensure future decisions aligned with the IS vision
Virtual networks
the connections between network nodes are intangible and invisible. The nodes of a virtual network are typically people rather than devices Instagram network Skype network App Store network
Costs Are Sunk
the expenses that the firm has incurred to create its product or service cannot be recuperated higher risk
Plans simplify decisions making over time
the firm will not be in the common situation in which it has to select projects to fund as part of the yearly budgeting process, with little sense of overall direction and purpose
relationship requirements
the need for process participants to interact in a social or professional context: business meetings online vs FTF
Physical Network
the nodes of the network are connected by physical links Telephone network Railroad network
The Decreasing Value of Asymmetric Information
the richness/reach frontier is progressively pushed outward
Business-to-Business (B2B)
transactions in which two or more business entities take part (e.g., Alibaba.com)
eGovernment
transactions involving legislative and administrative institutions (e.g., electronic filing of income tax)
Consumer-to-Business (C2B)
transactions occur when individuals transact with business organizations not as buyers of goods and services but as suppliers (e.g., Upwork.com)
Consumer-to-Consumer (C2C)
transactions that enable individual consumers to interact and transact directly (e.g., Ebay)
Business-to-Consumer (B2C)
transactions that involve a for-profit organization on one side and an end consumer on the other (e.g., Amazon.com)
Marketplace network
two-sided networks where demand and offer meet. Success depends: Solving the chicken or the egg problem -> the fact that in a two-sided network, each side is waiting for the other to grow prior to joining the network Deciding which side to monetize and which side to subsidize
Platform Network
two-sided networks with specific members on the two sides: users and developers (windows, IOS, android) 1) the more application developers build for the platform, the more attractive the platform becomes to users 2) The more users who join the platform, the more valuable contributing applications to it becomes for the developers
Gig Economy
where a solopreneur contributes such as a ride on uber and is compensated by the aggregator that manages the marketplace in which those services are provided No direct relationship or loyal between the customer ordering the food and the deliveroos rider who delivers it
