Lecture 31 - Understanding a networked world. In this chapter we will consider: Understanding a networked world, the internet mindset, where’s the value in a network? the rules of networks, moving forward, understanding users, increasing executives’ understanding of IT.
Trang 1Understanding A Networked
World Lecture 31
Trang 2Today’s Lecture
n Understanding A Networked World
¨ The Internet Mindset
¨ Where’s the Value in a Network?
¨ The Rules of Networks
n Moving Forward
¨ Understanding Users
¨ Increasing Executives’ Understanding of IT
Trang 3Understanding A Networked World
n Our networked world has different
characteristics from the non-networked world many people are used to living in
Trang 4Understanding A Networked World
The Internet Mindset
Just as PCs turned the mainframe data processing mindset upside down, this new world of
communications, with its multi-dimensions and
interactivity, wreaks havoc with businesses unless they understand and embrace the mindset of the global online world
The Internet mindset:
1. Communication is personal, not mass market
2. Customer contact is interactive, not broadcast
3. The customer time frame is theirs, not yours
4. The culture is bottom-up, not top-down
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The Internet Mindset cont.
1. Communication is personal, not mass market
n. Communication is ‘up close and personal’, not top-down
mass marketing
n. Message to traditional marketing departments = “Your ad
copy is boring”
n. Some corporate Web pages are stuck in the traditional
advertising model, ‘duplicating’ the ‘printed page’
¨ THEY ARE USING THE WRONG MINDSET: MASS
MARKET RATHER THAN PERSONAL
n. Others get it ‘right’ and give people a way to create their
‘own’ pages e.g My-Yahoo, My-CNN etc
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The Internet Mindset cont.
2. Customer Contact is Interactive, Not Broadcast
n. The single most important point of view to take toward the
Internet is to view it as interactive, not broadcast:
¨ Incoming, not outgoing
n. In essence, the Internet is a customer’s window to
companies
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The Internet Mindset cont.
n It is substantially different from TV because customers
can initiate communications with a firm rather than
merely react to their ads
n Customer-initiated dialog supported by the Internet
significantly challenges marketing departments,
customer support groups and fulfillment folks
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The Internet Mindset cont.
3. The customer time frame is theirs, not yours
n. Customers are closer than most companies have ever
experienced
n. Being put on hold increasingly irks
¨ Today’s consumers are busy with little patience with
waiting
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The Internet Mindset cont.
¨ As with TV remote controls, customers who do not
get immediate satisfaction will switch to the competition with a point and click
n Assess any proposed Internet business solution:
¨ WILL OUR FIRM’S INTERNET STRATEGY TRULY
HELP OUR CUSTOMERS COMMUNICATE WITH US?
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The Internet Mindset cont.
4. The culture is bottom-up, not top-down
n. The Internet is not the expert’s world where the few
impart their knowledge to the many
n. The message is clear for IS departments:
¨ IS cannot work in the top-down broadcast mode, “I’m
IS and I’m the expert, so here’s your solution customer”
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The Internet Mindset cont.
¨ More than ever, IS must get input from its
customers to determine the services they want, when they want them and where they want them
n Hearing directly from customers is both a goldmine
and a massive challenge, especially to those with a broadcast mindset
n FEEDBACK, FEEDBACK, FEEDBACK!!
Trang 12Understanding A Networked World Where’s the Value in a Network?
n To leverage the Internet (or any network), it helps to
understand where value is created
n When computers (or items containing computers) are
not networked, each one needs to provide both end and back-end intelligence (coupled intelligence)
front-n Introduce a network and these two forms of intelligence
can be decoupled, and better optimized
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Where’s the Value in a Network? cont.
n The back-end intelligence (to store and process data) is
best when centralized, made robust, is stable, is
standardized, and can be housed in a core-shared
infrastructure
n The front-end intelligence (for interacting with the user),
is most useful when it can be dispersed to a myriad of devices that can be small, mobile, customized, and
specialized
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Where’s the Value in a Network? cont.
n Networks allow value in four places, leading to four
new kinds of businesses:
1. At the core and periphery
2. In common infrastructures
3. In modules
4. From orchestration
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Where’s the Value in a Network? cont.
1. Core and Periphery Services
n. Value moves to the ends
¨ Value is in the core (leadership and strategy
handled by top management) and the periphery (customer-facing employees making decisions and taking actions) – or in the IT infrastructure and end devices
Trang 16Understanding A Networked World Where’s the Value in a Network? cont.
2. Common Infrastructures
n. Elements of any infrastructure
¨ An organization, a system, a business process…
n. That were distributed are being pulled together and
operated as a utility
Trang 17Understanding A Networked World Where’s the Value in a Network? cont.
3. Modules
n. Software, devices, organizational capabilities, and business
processes are being divided into self-standing modules so that they can quickly and easily connect to form a value
chain for responding to circumstances
4. Orchestrating Modules
n. When modules are abundant, there’s value in being able to
bring them together
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The Rules of Networks
n Three distinguishing characteristics of e-economy:
1. It is global
2. It favors soft things - intangibles, such as software,
information, ideas, and most importantly relationships - over hard things, such as trucks, steel, and cement
3. It is intensely interlinked
Trang 19The Rules of Networks cont.
1 Aim for Relationship Tech.
n All about connecting
¨ Connecting more devices to a network exponentially
increases the value of the network for everyone involved as
so many new connections are created
¨ Today’s world is all about networks = connecting.
¨ With unlimited connections & abundant information, the
organization is peer-to-peer rather than hierarchical
Trang 20The Rules of Networks cont.
1 Aim for Relationship Tech.
¨ Customer & company create together on a peer-to-peer basis, they both get smarter together & develop a closer relationship
¨ Technology that enhances these relationships is called
relationship tech
¨ Company with the smartest customers wins – requires more trust from both company & customer
Trang 21The Rules of Networks cont.
2 Follow the Free
n The best gets better and cheaper at the same time
¨ The network economy is founded on this principle of decreasing price for increasing quality – smart companies anticipate this & offer products for free
¨ The most valuable goods & services are those that are most abundant – they increase the value of every other one
Trang 22The Rules of Networks cont.
2 Follow the Free
¨ Netscape gave the browser away free & sold the servers This strategy worked until Microsoft with a large market did the same thing & took away the market share
¨ How you make money in this market:
n Aim for free, but only achieve cheap = same effect
n Give away the core product & sell the service
n Structure the business so that you will be profitable when your
product is free
Trang 23The Rules of Networks cont.
3 Feed the Web First
n More important to be on the right network or network platform
¨ It is important to be on the right network, or
network platform – a Mac or Windows person?
¨ A companies success depends on the standards it chooses – choice of ERP packages & bolt-ons to then choose from
Trang 24The Rules of Networks cont.
3 Feed the Web First
¨ In the network economy, enterprises will shift their focus from maximizing their own value to maximizing the value of their network
¨ Its to early to tell how important one wireless Internet access platform will be over another & to whom the choice will have the greatest value
Trang 25Moving Forward
n It is people who will lead us into this new business world and the people who will be led
n First = discuss the followers
n Then = what the leaders need to know to be
comfortable with talking about IT
n N.B.: Not all people have the same inclinations to use
IT
Trang 26Moving Forward Understanding Users
n Individuals, work groups, departments, even business units have different levels of eagerness concerning any new technology
¨ To help them use a new technology IS needs to
understand user comfort levels
Trang 27Moving Forward Understanding Users
n Levels of comfort with new Technology (see Figure 1):
14-¨ Eager Beavers: The Innovators and Pioneers (.5%)
¨ Early Adopters: The First Consumers (5%)
¨ Early Majority: The First Big wave (30-35%)
¨ Late Majority: The Technology Skeptics (40-50%)
¨ Technically Averse: “Not On My Time You Don’t” 15%)
Trang 29(10-Moving Forward Understanding Users cont.
1. Eager Beavers - The Innovators and Pioneers
n. Noisiest
n. Everything about (technology) is wonderful (today =
wireless)
¨ Most = in software and hardware companies where
their enthusiasm (vision?) might be an asset
Trang 30Moving Forward Understanding Users cont.
¨ Some = part of ‘Advanced Technology Group’
n Approach = support them with some funding and learn
from them
¨ ‘Bleeding edge’ companies may need to support
with big $$$$
Trang 31Moving Forward Understanding Users cont.
2. Early Adopters: The First Consumers
n. ‘Disciples’, not too far behind the innovators
n. Often have a lot of discretionary income ($$$) and think
the corporation does too!
n. Enterprises could miss a market by ignoring these
people
Trang 32Moving Forward Understanding Users cont.
n Approach = Need to be managed
n They need IS’s help and encouragement but should
not be allowed to overwhelm
n Watch $$$ closely!
¨ Make sure they invest their own money in the
experiments
Trang 33Moving Forward Understanding Users cont.
3. Early Majority: The First Big Wave
n Willing to use technology but need some help to make it
happen
n Not the self-sufficient pioneers or risk takers
n Tend to be in relatively important positions
n Make or break introduction of new technology
Trang 34Moving Forward Understanding Users cont.
n Approach = Need to understand how they view the
company, customers and competition; then help them choose a strategy to expand their familiarity with, say, the wireless Internet
n IS management must become adept at creating
options that can be tested for acceptance or rejection
Trang 35Moving Forward Understanding Users cont.
4. Late Majority: The Technology Skeptics
n. Not afraid of technology, but they do have serious
concerns about risks and costs
n. Concerned about wasting time and $
n. Approach = IS management needs to be prepared to
address risks and costs as they are to address
technology opportunities
n. Need to show an appreciation of ‘bottom-line’ ($)
concerns and answer security questions at a level that late majority people can appreciate
Trang 36Moving Forward Understanding Users cont.
5. Technically Averse: Not on My Time You Don’t
n. Resist technology e.g not currently doing anything
about the wireless Internet or Web Services
n. In many cases, their concerns about loss of privacy,
security, control, and possible exposure to competition override any perceived benefits of the technology
Trang 37Moving Forward Understanding Users cont.
n Approach = IS first needs to understand their concerns
n They (may) have justifiable business fears that need to
be identified and addressed before any thought of
using a new technology for business purposes can be entertained
Trang 38Moving Forward Understanding Users cont.
The Technology Camel:
IS Management – The ‘Bottom Line’
n IS Department (Management) need to recognize and
acknowledge each cluster’s concerns about new
technology, and then develop a multi-tiered approach
to respond to the diverse concerns
¨ Eager Beavers: The Innovators and Pioneers
(.5%)
¨ Early Adopters: The First Consumers (5%)
¨ Early Majority: The First Big wave (30-35%)
¨ Late Majority: The Technology Skeptics (40-50%)
¨ Technically Averse: “Not On My Time You Don’t”
(10-15%)
Trang 39Moving Forward Increasing Executives’ Understanding of IT
• Leadership of IT is no longer a technical challenge; it
is a challenge for all business managers
CIOs need to ensure that the business managers:
¨ Stay abreast of the changes and new uses of IT
¨ Are comfortable with IT, and
¨ Understand its impact and potential value to the
business
Trang 40Moving Forward Increasing Executives’ Understanding of IT
cont
n The dot-com boom and bust also had a “damaging”
effect on collective opinions about IT because many executives and venture capitalists believe the money they spent creating Websites and funding new e-
businesses was wasted
¨ New channels to the customer did not pay off
n As a result, many now de-emphasize the importance
of e-commerce at the very time when early promise
is being realized in many industries and sectors
Trang 41Moving Forward Increasing Executives’ Understanding of IT
cont
n There is an e-commerce boom taking place right now,
even though the hype is gone
n CIOs need to be concerned with the potential gap
between what their fellow business executives believe
is important about IT versus what they really need to know to effectively guide the use of IT
Trang 42Increasing Executives’ Understanding of IT cont.
Executives’ Leadership Roles
n These roles include:
¨ Setting the tone of the enterprise toward
technology
¨ Envisioning how IT can serve business strategy
¨ Governing as well as leading
¨ Using IT to promote business change, and
¨ Assessing costs and benefits
Trang 43Increasing Executives’ Understanding of IT cont Current, Longstanding, and Upcoming IT Issues
n The impact of new regulations is a current issue, with
a potentially huge impact
n Project management is another topic of current
interest
n Measuring the value of IT is a continuing topic of
interest, as is change management and organization and control of the IS organization
n Cross-organizational e-processes are areas on the
verge of breaking through, as is obtaining services
via the Web
Trang 44Increasing Executives’ Understanding of IT cont.
Means for Executive Learning
n These include:
¨ Learning by doing
¨ Learning by governing, and
¨ Learning via educational programs
Trang 45MIT’S IT FOR THE NON-IT EXECUTIVE
PROGRAM
Case Example: Executive Learning
n This two-day course is given three times a year and has 60-75 attendees
n The program is not about technology; rather, it
presents frameworks and a vocabulary to help non-IT managers and executives understand, in business terms, what is going on with the technology
Trang 46Moving Forward Educating IS About the Business
n “When it comes to educating users about IT, my philosophy is that we in IS should be educating ourselves about the business environment”
n Some options
¨ Train in the Business
¨ Move into the Business
n Encourage direct reports to move into the business
¨Include an option to come back
¨ Lead with the Business
n Get the business to take the lead on an IT project
¨ Attend Business Programs
n Need for education in “business speak”