P. 1
Semester 2 Assg 1 MIS

Semester 2 Assg 1 MIS

5.0

|Views: 1,902|Likes:
Published by Zahid Nazir

More info:

Published by: Zahid Nazir on Oct 04, 2009
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

09/08/2012

pdf

text

original

Assignment 1

Management information system
Executive MBA/MPA

Zahid nazir
Roll # ab523655 Semester: spring 2009
Zahid Nazir Roll# AB523655 Page | 1

Question 1

a). Discuss Information System versus Information Technology

b). Explain types of MIS and explain the impact of these MIS types on organizations.

Zahid Nazir Roll# AB523655

Page | 2

a). Information Systems:
“Information system means an interconnected set of information resources under the same direct management control that shares common functionality.” A system normally includes hardware, software, information, data, application, communication, and people. It is also defined as an organized collection, storage, and presentation system of data and other knowledge for decision making, progress reporting, and for planning and evaluation of programs that can be either manual or computerized, or a combination of both. Typically, data is first collected and transformed into a form that is suitable for processing as the input. Then, data is processed and transformed into information which finally is stored for future use in storage, or communicated to its users as output according to correct processing procedures. For example, a person walks into a sundry shop and buys a newspaper, a magazine, a bottled drink and ice cream. At the cashier counter, the shopkeeper keys in the prices of all the four items bought into a calculator. After adding them up, he gets the total amount to be collected and informs you about it. The calculator is only part of an information system. In fact, it is actually part of a manual information system that comprises of the calculator, the shopkeeper and the prices of items bought. This manual information system may look simple but it can handle information management in the sundry shop. It inputs data and then processes then into accurate information. It then delivers the information or the output at the time required, to the shopkeeper who is an end-user.

Zahid Nazir Roll# AB523655

Page | 3

Regardless of whether it is manual or computer-based, an information system operates based on the input-processing-output model. Using the example of the sundry shop, the operations of an information system, data - such as the prices, are treated like a resource. They are put through the information processing of calculations, and converted into the total amount to be collected, an information product. Information systems play a very important role in organizations, as they provide the information required for many kinds of decision-making. However, information systems can contribute to an organization in other ways. Information systems perform three vital roles in any types of organizations. Provide support for managerial decision-making, Provide support for business operations Provide support for strategic competitive organizations. Support for Managerial Decision Making A manager in an organization has to provide leadership and direction in organizations. Information systems provide the support for managerial decision-making. Wrong decisions made due to lack of information on the side of the manager will affect the organization. For example, during an economic crisis, management may have to resort to either retrenching staff or cutting their salaries to ensure that the organization is able to operate. When an alternative is selected, it must ensure that the organizations survive the economic crisis and the welfare of their personnel is taken care of. To be able to decide between two alternatives, a manager must be equipped with the right information. For example, in considering retrenchment (staff reduction), they would need information on the number of staff and information on the labor laws. On the other hand, in

advantage

in

Zahid Nazir Roll# AB523655

Page | 4

considering the salary cut they would have to look at information on the annual budget and current salary. Support for Business Operations Information systems also provide support for business operations. Many organizations today make use of computer-based information systems to automate parts of their daily operations. This helps to improve internal efficiency. Cashiers in some supermarkets today, do not even have to key in the price of the items bought when calculating the total amount to be paid by the customers. They just put the items under the scanner and the price would appear on the screen automatically, minimizing clerical work. Support for Strategic Competitive Advantage The second role of information systems is providing organizations with support for strategic competitive advantage. These systems support organizations in developing products, services, processes or capabilities that give them a strategic advantage over their competitors. In addition to this, information systems are able to influence the environmental forces to gain extra advantage. An environmental force is a term describing the suppliers, customers, investors, bankers and wholesalers who surround an organization. These forces have the potential to either support or break the organization. Like the example of using scanners at the cashier counters. The task of keying in prices is now automated. Automation minimizes human error. With errors minimized, production costs goes down and the finished products can be sold at a cheaper price. Now, that is an advantage over competitors and it would also attract. The competitive edge that an organization has over other organizations will attract the attention of the environmental forces. Banks for instance, would certainly be more willing to provide the necessary loan or

Zahid Nazir Roll# AB523655

Page | 5

investment if they see a bright future in the products or services introduced to them. The support provided by an information system in creating strategic competitive advantage can be seen from the perspective of cost strategy, differentiation strategy and innovation strategy. Low production cost means low customers' cost. Customers would indeed prefer a product of a low price to an identical product at a higher price. By providing the three forms of support, information systems play an essential role in molding the success or failure of organizations.

INFORMATION TECHNOLOGY
Information is basically facts and ideas that are expressed through a mutually understandable language. It has been around even in the days of the caveman. Information Technology or IT for short in the other point is any tools or techniques used to collect, store, process, use and disseminate information. Tools in IT can be divided into physical tool and symbolic tool. Physical tool consists of telephones, computers, cameras and any peripherals or devices that can achieve the objectives mentioned above. For symbolic tool, it consists of written and spoken languages, mathematical symbols, computer languages and tables of natural elements. There are several categories of IT. It includes Input Technologies, Communications Technologies, Processing Technologies, Storage Technologies and Output Technologies. Input Technologies include devices that help us gather information from the environment and translate that information in a form that can be understood by a computer. It also related with Sensing Technologies. Example of input devices are keyboard, mouse, light pen, touch screen, touch pad, joystick and etc.

Zahid Nazir Roll# AB523655

Page | 6

Communication Technologies are technologies that tie together and communicate information between input, analyzing and output technologies. Some of the examples are the implementation of LAN, MAN and WAN, cellular telephones, fax, resource sharing and etc. These technologies have overcome the difficulties in distributing information at distance area. Processing Technologies include computer hardware and software. It is also known as Analyzing Technologies. The main concern of this technology is to get raw facts turn to useful information. Computers take in raw facts (input) from sensing and communicating devices and then store and process the raw facts and turn it out as useful information (output). Storage Technologies refer to devices that are used to keep or store data and instruction. The examples such as floppy disk, hard disk, optical disk, micro chip, magnetic strip card and etc. Finally, is the Output Technologies. Output technologies describes computer hardware and software that make processed data available to human users, either through sight or sound. This is also known as Display Technologies. Examples are monitor, speaker, printer and etc. With the application of IT, it helps much in managing our daily activities efficiently. It can create and keep track of documents, control production in manufacturing site, design new products, software and etc. market products around the world and also expand interaction and communication to the whole world. Nowadays, IT has influenced much in our lives be it in our daily activities, organization, education, communication or socialism. With the emergence of telecommunications, the role of IT is much beyond the expectations. From air mail to electronic mail, retails to electronic commerce and mobile commerce, window shopping to tele-shopping and also online transaction that could ease the burden of crowded banks.
Zahid Nazir Roll# AB523655 Page | 7

Education for example, we could see the major changes in the traditional way of acquiring knowledge or learning in some higher learning institution. They are now make full use of the IT by promoting virtual learning or online learning to attract the people regardless of their age to further their studies. Telecommunication on the other side, also promotes the flexible and convenient way of communicating. From wire line to wireless, it now seems like everybody could enjoy the benefits derived from its emergence. Many technologies also arise from telecommunications such as WiFi, Bluetooth, Edge, 3G, GPRS and etc that could be implemented to make use of messaging system. In socialism, IT has changed the way we interact and socialize. Information transfer is done also much faster compared to the traditional way. If air mail could reach the recipients in few days, electronic mail has cut it to few seconds. By using video conferencing too, your loved ones who are far away could see you as if you were right in front one another. That is why distance is not a gap anymore. CONCLUSION: Information system concern more with managing and manipulate data where as IT is the tools or techniques that could help in managing and manipulate the data. Both are not the same but they are actually interrelated with each other. Either party would not function well with the absence of one of it.

Reference: http://www.dynamic-education.com

Zahid Nazir Roll# AB523655

Page | 8

b).

MANAGEMENT INFORMATION SYSTEM
Management information systems are those systems that allow managers to make decisions for the successful operation of businesses. Management information systems consist of computer resources, people, and procedures used in the modern business enterprise. The term MIS stands for management information systems. MIS also refers to the organization that develops and maintains most or all of the computer systems in the enterprise so that managers can make decisions. The goal of the MIS organization is to deliver information systems to the various levels of corporate managers. MIS professionals create and support the computer system throughout the company. Trained and educated to work with corporate computer systems, these professionals are responsible in some way for nearly all of the computers, from the largest mainframe to the desktop and portable PCs. Management information systems can be used as a support to managers to provide a competitive advantage. The system must support the goals of the organization. Most organizations are structured along functional lines, and the typical systems are identified as follows:

Accounting management information systems: All accounting reports are shared by all levels of accounting managers. Financial management information systems: The financial management information system provides financial information to all financial managers within an organization including the chief financial officer. The chief financial officer analyzes historical and current financial activity, projects future financial needs, and monitors and

Zahid Nazir Roll# AB523655

Page | 9

controls the use of funds over time using the information developed by the MIS department. Manufacturing management information systems: More than any functional area, operations have been impacted by great advances in technology. As a result, manufacturing operations have changed. For instance, inventories are provided just in time so that great amounts of money are not spent for warehousing huge inventories. In some instances, raw materials are even processed on railroad cars waiting to be sent directly to the factory. Thus there is no need for warehousing. Marketing management information systems: A marketing management information system supports managerial activity in the area of product development, distribution, pricing decisions, promotional effectiveness, and sales forecasting. More than any other functional area, marketing systems rely on external sources of data. These sources include competition and customers, for example. Human resources management information systems: Human resources management information systems are concerned with activities related to workers, managers, and other individuals employed by the organization. Because the personnel function relates to all other areas in business, the human resources management information system plays a valuable role in ensuring organizational success. Activities performed by the human resources management information systems include, work-force analysis and planning, hiring, training, and job assignments.

IMPACT OF MIS ON ORGANISATIONS MIS exerts a strong influence on organizations because it can affect both production and coordination, where production refers to the task of producing goods or services. A major research program called

Zahid Nazir Roll# AB523655

Page | 10

Management in the 1990s, was initiated to examine the impact of IT on organizations. The findings of research are: • IT enables fundamental changes in the ways of work. • IT enables the integration of business functions at all levels within and between organizations. • IT enables shift in the competitive climate in many industries. • IT presents new strategic opportunities for organizations that reassess their missions and operations. • Successful applications of IT require changes in management and organizational structure. MIS’s impact on work, business functions, industrial competition and organizational strategy. Impact of MIS on nature of work: The extent to which MIS has an impact on a person’s work depends on how much of the work is based on information. This information may be related to production work, which is the work done to produce goods and services, or to coordinative work, which involves working in conjunction with others. MIS’s high potential impact on production work is obvious if we break production into its three constituent elements: • Physical Production, which is affected by robotics, process control instrumentations and intelligent sensors. • Information Production, which is affected by computerization of the standard clerical tasks such as accounts receivables, billing etc. • Knowledge Production, which is affected computer-aided design/computer-aided manufacture (CAD/CAM) tools, customized work stations for specific work such as new software and a new legislation.
Zahid Nazir Roll# AB523655 Page | 11

As an enabler of connectivity IT has a high impact on the economics and functionality of the coordination process. The impact can be easily seen in three areas: • Distance can be shrunk to almost zero through electronic communications. • Elapsed time can be shrunk towards zero or tasks can be shifted to a more convenient point, as in the case of airline reservation systems, which could be used worldwide all the time. • Organizational memory can be maintained (through a database) over time and can be shared among many users. In addition to production and coordination, IT also affects management work, especially with respect to its direction and control aspects. As for direction, it involves sensing changes in the external environment, which is easily facilitated by IT based systems such as an executive support system or a customer feedback system. For control, IT helps in tracking an organization’s performance and analyzing the variance against the plan or preset standards. Impact of IT on Business Functions: Enhanced connectivity and information accessibility through IT has permitted an “any information, at any time, anywhere and any way one wants to look at it” philoshiphy in an cost effective manner. Thus boundaries of organizations are becoming more permeable, and where work gets down, when and with whom is changing. This has enormously speeded up the flow of work in and around the organization. In turn, this has permitted possible integration in many areas such as: • Teams within the organization: For example design, engineering, and manufacturing people can be connected together through local and/or global networks to work as a team focusing on one product, as done by Xerox.

Zahid Nazir Roll# AB523655

Page | 12

• End-to-End links b/w organizations: For instance a supplier’s shipping department can be connected to the buyer’s purchasing department for business transactions. This shifts the boundary of the organization out to overlap with others, thus creating a virtual organization. • Electronic alliances: an organization may perform one stage or part of a manufacturing or design task and subcontract either a specific task or the whole stage to another (electronically linked) organization. • Electronic markets: Here coordination within a few or all organizations gives way to an open market. For example, travel agents can reserve seats electronically from all major carriers, and therefore can look for a best price for the customer. Thus the reservation system acts like an electronic market. Impact on Industrial Competition: At the industry level, IT has a unique impact on the competitive climate by permitting a high degree of simultaneous competition and collaboration between organizations. Another unique impact of IT on competitiveness concerns the importance of standards. It is now important for an organization to know when to support standards and when try to pre-empt competitors by establishing a proprietary de facto standard. Impact of IT on Organizational Strategy While computers cannot create business strategies by themselves they can assist management in understanding the effects of their strategies, and help enable effective decision-making. MIS systems can be used to transform data into information useful for decision making. Computers can provide financial statements and performance reports to assist in the planning, monitoring and implementation of strategy.
Zahid Nazir Roll# AB523655 Page | 13

MIS systems provide a valuable function in that they can collate into coherent reports unmanageable volumes of data that would otherwise be broadly useless to decision makers. By studying these reports decision-makers can identify patterns and trends that would have remained unseen if the raw data were consulted manually. MIS systems can also use these raw data to run simulations – hypothetical scenarios that answer a range of ‘what if’ questions regarding alterations in strategy. For instance, MIS systems can provide predictions about the effect on sales that an alteration in price would have on a product. These Decision Support Systems (DSS) enable more informed decision making within an enterprise than would be possible without MIS systems.

Reference:
www.spk.uum.edu.my/aidi

*******************

Zahid Nazir Roll# AB523655

Page | 14

Question 2

A). Explain the impact of different types of MIS on users attitude in organization. Also design a model that is showing the factors which are positively or negatively impacting on organization. (Take one organization as an example).

b). Explain that what the impact is after implementation of (above) types of MIS and compare it with before implementation.

Zahid Nazir Roll# AB523655

Page | 15

a). ROLE OF THE MANAGEMENT INFORMATION SYSTEM
The role of the MIS in an organization can be compared to the role of heart in the body. The information is the blood and MIS is the heart. In the body the heart plays the role of supplying pure blood to all the elements of the body including the brain. The heart works faster and supplies more blood when needed. It regulates and controls the incoming impure blood, processes it and sends it to the destination in the quantity needed. It fulfills the needs of blood supply to human body in normal course and also in crisis. The MIS plays exactly the same role in the organization. The system ensures that an appropriate data is collected from the various sources, processed, and sent further to all the needy destinations. The system is expected to fulfill the information needs of an individual, a group of individuals, the management functionaries: the managers and the top management. The MIS satisfies the diverse needs through a variety of systems such as Query Systems, Analysis Systems, Modeling Systems and Decision Support Systems the MIS helps in Strategic Planning, Management Control, Operational Control and Transaction Processing. The MIS helps the clerical personnel in the transaction processing and answers their queries on the data pertaining to the transaction, the status of a particular record and references on a variety of documents. The MIS helps the junior management personnel by providing the operational data for planning, scheduling and control, and helps them further in decision making at the operations level to correct an out of control situation. The MIS helps the middle management in short them planning, target setting and controlling the business functions. It is supported by the use of the management tools of planning and control. The MIS helps

Zahid Nazir Roll# AB523655

Page | 16

the top management in goal setting, strategic planning and evolving the business plans and their implementation. The MIS plays the role of information generation, communication, problem identification and helps in the process of decision making. The MIS, therefore, plays a vita role in the management, administration and operations of an organization.

IMPACT OF THE MANAGEMENT INFORMATION SYSTEM
Since the MIS plays a very important role in the organization, it creates an impact on the organization’s functions, performance and productivity. The impact of MIS on the functions is in its management. With a good support, the management of marking, finance, production and personnel become more efficient. The tracking and monitoring of the functional targets becomes easy. The functional, managers are informed about the progress, achievements and shortfalls in the probable trends in the various aspects of business. This helps in forecasting and longterm perspective planning. The manager’s attention is brought to a situation which is exceptional in nature, inducing him to take an action or a decision in the matter. A disciplined information reporting system creates a structured data and a knowledge base for all the people in the organization. The information is available in such a form that it can be used straight away or by blending analysis, saving the manager’s valuable time. The MIS creates another impact in the organization which relates to the understanding of the business itself. The MIS begins with the definition of a data entity and its attributes. It uses a dictionary if data, entity and attributes, respectively, designed for information generation in the organization. Since all the information system use the dictionary, there is common understanding of terms and terminology in the organization brining clarity in the communication and a similar understanding an even of the organization.
Zahid Nazir Roll# AB523655 Page | 17

The MIS calls for a systemization of the business operation for an affective system design. A well designed system with a focus on the manger makes an impact on the managerial efficiency. The fund of information motivates an enlightened manger to use a variety of tools of the management. It helps him to resort to such exercises as experimentation and modeling. The use of computers enables him to use the tools techniques which are impossible to use manually. The ready-made packages make this task simpler. The impact is on the managerial ability to perform. It improves the decision making ability considerably. Since the MIS works on the basic systems such as transaction processing and databases, the drudgery of the clerical work is transferred to the computerized system, relieving the human mind for better work. It will be observed that a lot of manpower is engaged in this activity in the organization. It you study the individual’s time utilization and its application; you will find that seventy per cent of the time is spent in recording, searching, processing and communication. This is a large overhead in the organization. The MIS has a direct impact on this overhead. It creates an information- based work culture in the organization.

MIS AND THE USER
Every person in the organization is a user of the MIS. The people in the organization operate at all levels in the hierarchy. A typical user is a clerk, an assistant, an officer, an executive or a manager. Each of them has a specific task and a role to play in the management of business. The MIS caters to the needs of all persons. The main task of a clerk is to search the data, make a statement and submit it to the higher level. A clerk can use the MIS for a quick search
Zahid Nazir Roll# AB523655 Page | 18

and reporting the same to higher level. An assistant has the task of collecting and organizing the data, and conducting a rudimentary analysis of integrating the data from different and disciplines to analyze it and make a critical comment if anything adverse is found. The MIS offers the methods and facilities to integrate the data and report the same in a proper format. An executive plays the role of a decision maker. He is in of responsibility and accountability a position of a planner and a decision maker. He is responsible for achieving the target and goals of the organization. The MIS provides facilities to analyze the data and offers the decision support systems to perform the task of execution. The MIS provides an action . oriented information. The manager has a position of responsibility and accountability for the business results. His management role expands beyond his management function. He is a strategist and a long-term planner. He is a person with a foresight, an analytical ability and is expected to use these abilities in the functions of top management. The MIS provides information in a structured or unstructured format for him to react. The MIS caters to his constant changing needs of information. The user of the MIS is expected to be a rational person and the design of the MIS is based on this assumption. However, in reality the impact created on individuals by MIS is difficult to explain. The nature of the impact in a few cases is negative. However, this negative impact can be handled with proper training and counseling. It is observed that at lower level, is a sense of insecurity. As the MIS takes away the drudgery of search, collection, writing and reporting the data, the work vacuum, so created is not easily filled, thus creating a sense of insecurity. To some extent the importance of the person is also lost, giving rise to a fear of non-recognition in the organization.

Zahid Nazir Roll# AB523655

Page | 19

At the level of an officer and an executive, the MIS does the job the of data manipulation and integration. It analyses the data in a predetermined manner. This means that the knowledge of business is transferred from an individual to the MIS and is made available to all in the organization. This change arising out of the MIS creates a sense of being neglected for knowledge, information and advice. The psychological impact is larger if the person is not able to cope up with this change by expanding or enriching the job and the position held by him. The manager holding a position in the top or middle management suffers from fear of challenge and exposure. The MIS makes these competitors more effective as they have access to the information and have an ability to interpret. This leads to a situation where he is afraid that that his position, decision and defense will be challenged and may be proved wrong sometime. The risk of adverse exposure to the higher management also increases. The effects so far pointed out are all negative and they are seen only in few cases. The positive effects on the individuals at all levels are that they have become more effective operators. The time and energy which was spent earlier in unproductive work is now applied for a productive work. Some are able to use their analytical skills and knowledge with the in formation support for improving their position in the organization. Managers, having improved their decision . making ability, are able to handle the complex situations with relative ease. Some are benefited by improving their performance and being held in high esteem by the higher management. The enterprising managers are able to use the systems and the models for trying out a Number of alternatives in a given problem situation. The impact of the MIS on people of the organization is phenomenal as it has made the same body of people collectively more effective and productive.

Zahid Nazir Roll# AB523655

Page | 20

The recent major technological advances in communication such as Multimedia, Imaging. Graphical User Interfaces (GUI), Internet, Web etc. and the ability to access the data stored at different locations on the variety hardware of platforms would make MIS more attractive and efficient proposition. An intelligent user of information can demonstrate the ability of decision making, since his manipulative capability is considerably increased, with the information now being available on his desktop. Through the MIS, the information can be used as a strategic weapon to counter the threats to business, make business more competitive, and bring about the organizational transformation through integration. A good MIS also makes an organization seamless by removing all the communication barriers.

b).

IMPACT OF MIS AFTER IMPLEMENTATION A). IMPACTS OF IT ON ORGANIZATIONS
The use of computers and information technology has brought many changes to organizations. These changes are being felt in different areas including the manager’s job, structure, authority, power, and job content; employee career ladders and supervision. A brief discussion of these issues follows. The Manager’s Job The most important task of managers is making decisions. IT can change the manner in which many decisions are made, and consequently change managers’ jobs. The most probable areas of organizational change are:
Zahid Nazir Roll# AB523655 Page | 21

• • • • • • •

• •

Automation of routine decisions (e.g., frontline employees). Less expertise required for many decisions. More rapid identification of problems and opportunities . Less reliance on experts to provide support to top executives. Empowerment of lower and middle levels of management due to knowledge bases. Decision making undertaken by nonmanagerial employees. Power redistribution among managers, and power shifts down the organization. Fewer organizational levels typically are required to authorize action. Organizational intelligence that is more timely, comprehensive, accurate, and available Electronic support of complex decisions (the Web, intelligent agents, DSS).

Many managers have reported that the computer has finally given them time to “get out of the office and into the field.” They also have found that they can spend more time planning activities instead of “putting out fires.” The ability of IT to support the process of decision making changes the decision-making process and even decision-making styles. For example, information gathering for decision-making can be done much more quickly. Web-based intelligent agents can monitor the environment, and scan and interpret information. Most managers currently work on a large number of problems simultaneously, moving from one to another as they wait for more information on their current problem or until some external event interrupts them. IT tends to reduce the time necessary to complete any step in the decision-making process. Therefore, managers can work on fewer tasks during each day but complete more of them. Another possible impact on the manager’s job is a change in leadership requirements. What are generally considered to be good qualities of leadership may be significantly altered with the use of IT. For example, when face-to-face communication is replaced by e-mail and
Zahid Nazir Roll# AB523655 Page | 22

computerized conferencing, leadership qualities attributed to physical appearance and dress codes could be minimized.

B) IMPACTS OF IT ON INDIVIDUALS
Information systems affect individuals in various ways. What is a benefit to one individual may be a curse to another. This section discusses some of the ways that IT may affect individuals, their perceptions, and their behaviors. Job Satisfaction, Dehumanization, and Information Anxiety Although many jobs may become substantially more “enriched” with IT, other jobs may become more routine and less satisfying. For example, as early as 1970, researchers predicted that computer-based information systems would reduce managerial discretion in decision making and thus create dissatisfied managers. This dissatisfaction may be the result of perceived dehumanization. Dehumanization and other Psychological Impacts . A frequent criticism of traditional data processing systems was their impersonal nature and their potential to dehumanize and depersonalize the activities that have been computerized. Many people felt, and still feel, a loss of identity, a dehumanization, because of computerization; they feel like “just another number” because computers reduce or eliminate the human element that was present in the noncomputerized systems. Some people also feel this way about the Web. On the other hand, while the major objective of newer technologies, such as e-commerce, is to increase productivity, they can also create personalized, flexible systems that allow individuals to include their opinions and knowledge in the system. These technologies attempt to be people-oriented and user-friendly. The Internet threatens to have an even more isolating influence than has
Zahid Nazir Roll# AB523655 Page | 23

been created by television. If people are encouraged to work and shop from their living rooms, then some unfortunate psychological effects, such as depression and loneliness, could develop. Some people have become so addicted to the Web that they have dropped out of their regular social activities, at school or work or home, creating new societal and organizational problems. Another possible psychological impact relates to distance learning. In some countries, it is legal to school children at home through IT. Some argue, however, that the lack of social contacts could be damaging to the social, moral, and cognitive development of school-age children who spend long periods of time working alone on the computer. Information Anxiety. One of the negative impacts of the information age is information anxiety. This disquiet can take several forms, such as frustration with our inability to keep up with the amount of data present in our lives. Information anxiety can take other forms as well. One is frustration with the quality of the information available on the Web, which frequently is not up-to-date or is incomplete. Another is frustration or guilt associated with not being better informed, or being informed too late (“How come others knew this before I did?”). A third form of information anxiety stems from information overload (too many online sources). For some Internet users, anxiety resulting from information overload may even result in inadequate or poor sleep. According to Wurman (2000), between 60 and 80 percent of the people searching for specific information on the Web cannot find what they want among the various types of information available. This adds to anxiety, as does the data glut that obscures the distinction between data and information, and between facts and knowledge. Wurman (2001) prescribes solutions to ease the problem of information anxiety, ranging from better access to data to better design of Web sites.

Zahid Nazir Roll# AB523655

Page | 24

Impacts on Health and Safety
Computers and information systems are a part of the environment that may adversely affect individuals’ health and safety. To illustrate, we will discuss the effects of three issues: job stress, video display terminals, and long-term use of the keyboard. Job Stress. An increase in workload and/or responsibilities can trigger job stress. Although computerization has benefited organizations by increasing productivity, it has also created an ever-increasing workload for some employees. Some workers, especially those who are not proficient with computers but who must work with them, feel overwhelmed and start feeling anxious about their jobs and their performance. These feelings of anxiety can adversely affect workers’ productivity. Management’s responsibility is to help alleviate these feelings by providing training, redistributing the workload among workers, or by hiring more individuals. Video Display Terminals. Exposure to video display terminals (VDTs) raises the issue of the risk of radiation exposure, which has been linked to cancer and other health-related problems. Exposure to VDTs for long periods of time is thought to affect an individual’s eyesight, for example. Also, lengthy exposure to VDTs has been blamed for miscarriages in pregnant women. However, results of the research done to investigate these charges have been inconclusive. Repetitive Strain (Stress) Injuries. Other potential health and safety hazards are repetitive strain injuries such as backaches and muscle tension in the wrists and fingers. Carpal tunnel syndrome is a painful form of repetitive strain injury that affects the wrists and hands. It has been associated with the long-term use of keyboards. According to Kome (2001), 6 million Americans suffered repetitive strain injuries on the job between 1991 and 2001.

Zahid Nazir Roll# AB523655

Page | 25

Lessening the Negative Impact on Health & Safety. Designers are aware of the potential problems associated with prolonged use of computers. Consequently, they have attempted to design a better computing environment. Research in the area of ergonomics (the science of adapting machines and work environments to people) provides guidance for these designers. For instance, ergonomic techniques focus on creating an environment for the worker that is safe, well lit, and comfortable. Devices such as antiglare screens have helped alleviate problems of fatigued or damaged eyesight, and chairs that contour the human body have helped decrease backaches.

Reference:
Introduction to MIS Impact of IT on individuals and organization

**************************

Zahid Nazir Roll# AB523655

Page | 26

Question 3

a). Explain in detail the affect of e-business on supply chain management process.

b). Describe and discuss various strategic approaches to e-business.

Zahid Nazir Roll# AB523655

Page | 27

a). Nothing has rocked the young field of supply chain management like the emergence of the Internet. While the management of information flows have always been a key aspect of supply chain management, the rapid growth of web-based information transfer between companies, their suppliers, and their customers has decidedly increased the importance of information management in creating effective supply chains. Indeed, the Internet has emerged as a most cost-effective means of driving supply chain integration. E-business is defined as the marriage between the Internet and supply chain integration. This marriage is transforming many processes within the supply chain from procurement to customer management and product design. e-procurement e-commerce

e-collaboration Fig: e-Business Forms and Their Impact on the Supply Chain

Zahid Nazir Roll# AB523655

Page | 28

What is Supply Chain Management?
Supply Chain management is the process of managing the movement of goods from suppliers to buyers. Supply Chain Management (SCM), also known as supply chain integration or supply chain optimization, is the process of optimizing a company's internal practices in interacting with suppliers and customers in order to bring products to market more efficiently. SCM functions encompass demand forecasting, sourcing and procurement, inventory and warehouse management, distribution logistics, and other disciplines. The SCM procedure repeatedly succeeds where Enterprise Resource Planning (ERP) fails. In order to correctly forecast inventory levels, the supply chain management system needs ERP’s database cooperation (Laudon & Laudon, 2002). A powerful SCM includes the systematization and optimization of operational and strategic information and methods within and between enterprises. SCM is connected with optimizing business processes and business value in every nook of the outspread enterprise, from the supplier's supplier to the customer's customer. SCM can utilize ebusiness concepts and Web technologies to bring the organization upstream and downstream. It is the strategic approach that combines all steps in the business cycle, from the beginning of the product design and the acquisition of raw materials for production to shipping, distribution, and warehousing, until a finished product is sold to the customer (Laudon & Laudon, 2002).

What is e-Business?
Laudon and Traver have defined e-Business as “the digital enablement of transactions and processes within a firm, involving information systems under the control of the firm, which doesn’t include the company’s revenue”. For example, a company’s inventory management system and warehousing do not affect its revenue directly, such as its sales strategies and models. It comes under the domain of e-Business. However e-commerce does affect revenue. By these points of view, it
Zahid Nazir Roll# AB523655 Page | 29

seems that a firm’s e-Business system can also support e-Commerce for external value exchange. Although e-Business has been defined as an electronic information management system for a company’s internal needs, some people still think the scope of e-Business transactions should cover e-Commerce. e-Business is used to manage a firm’s internal information. However, in order to be effective e-Business also needs to be supported by huge amounts of external information. In this instance, a manufacture’s inventory management needs to know from its suppliers the timeline for putting the materials on the production line. On the other hand, the production time-line relates to the products’ shipment date. Then those solutions extend to the customers and customers’ customers and complete the business. By this theory, eCommerce could be seen as the rear end of e-Business. Given this point of view, it does not only make e-commerce’s field smaller, it makes eCommerce a part of e-Business. People are still arguing about the definition of e-Business and e-Commerce, but from each of their incidence, it seems that e-Business is bigger than e-Commerce. This paper would support the view that e-Commerce is part of wider eBusiness applications. There are several types of business methods in today’s e-business copes, such as • Business-to Consumer (B2C) • Business-to-Business (B2B) • Consumer-to-Consumer (C2C) • Peer-to-Peer • Mobile, or m-Commerce

Effects of e-Business on the Supply Chain Management
A huge Gross Domestic Product (GDP) deficit between America and Third World countries has been evident since the early 1970’s. As the result, many American companies have decided to either close their
Zahid Nazir Roll# AB523655 Page | 30

production lines in America or move their factories to lower cost countries or they have bought products from Asian manufactures based in Japan, Korea, and Taiwan. This enabled them to gain bigger marketing power by gaining access to a cheaper production price. The supply chain has lengthened from a few hundred miles to at least ten thousand miles but the product prices, in addition to shipping costs, are still cheaper than before they made this change. In the 1970s, finding a manufacturer, or starting a new company, in another country is not easy, especially when facing cultural differences and legal issues. Also, bringing the products across the Pacific Ocean back to the United States can be very difficult because more third parties are involved in the supply chain. Information from Asia is not easy to find and much of the secondary information could be deemed useless or incorrect. These difficulties had brought some new jobs into the business (supply chain environment), such as brokers and agencies. In the first stage of business globalization, during 1970 to 1980, brokers and agencies had done a good job with helping companies on both sides of the Pacific Ocean. They provided the manufacture’s information to American companies and brought American business to Asian manufactories. Though this new pattern of the supply chain dealing with brokers and agencies had satisfied the demand from consumers in the United States and also brought huge revenue to Asian manufacturers. Marketing is about competition such as price, promotion, product, and placement. In the 1980s, the growing GDP in Asia had raised price of products cast a sub segment decline in companies’ profits. Once again, in mid-1980s, some companies decided to move their orders to other undeveloped countries such as China, the Philippines, and Vietnam. The second move seemed enough to keep the products’ prices as low as consumers demanded at the time. However in the 1990’s, the usage of the Internet gave the consumers huge leverage to compare prices from different sources.
Zahid Nazir Roll# AB523655 Page | 31

The Internet did not only give consumers more power to compare products’ prices, but also allowed companies to find more distributors easily. Also, American companies and Asian manufactures could easily reach each other without the necessity to pay commissions to agencies and brokers. This change has shaken up the whole supply chain environment because the Internet has collected huge amounts of information together for every one of us. Some industries have started to build up their internal information systems to connect the external web base delivery levels of need and to reach the goal of customization and personalization. The web-based applications have impacted brokers and agencies heavily and, as a result, forced some of them to go out of business. If web based applications can provide information to everyone in the market, the next stage of the supply chain in e-Business will concentrate on reducing the length of transaction process, and more distributors and retailers will face challenges.

Reference:
e-BUSINESS AND THE SUPPLY CHAIN MANAGEMENT by Jorge R. León-Peña E-BUSINESS AND SUPPL y CHAIN MANAGEMENT: AN OVERVIEW AND FRAMEWORK by M. ERIC JOHNSON AND SEUNGJIN WHANG.

*******************

Zahid Nazir Roll# AB523655

Page | 32

b)

STRATEGIC APPROACHES TO E-BUSINESS
With the advent of the Internet and plenty of web development technologies around the world, e-business is the new mantra of businesses in today’s world. The Internet has in many ways facilitated the development of businesses worldwide that can reach out to a wider consumer base and advertises their products more effectively and efficiently. Corporate communications, interface designs, cutting edge applications are also found on the Internet. E business has been added as the latest domain in business and has become a must-have in the highly competitive technology driven open market. E Business Strategy can be summarized as the strategies governing E Businesses through calculated information dissemination. Information dissemination has been widely regarded as the forte of ebusiness, which uses information technology in a most efficient manner. Not only has e-business has come to play an important role in the world trade scenario; there is no business without an accompanying e-business in today’s world. E business gives a business the opportunity to open its portal to the global market and become a part of the global business community. The most important feature of e-business is that the helps businesses move on to the international scene at minimal cost but with maximum efficiency. E-business has achieved unprecedented levels of success as business models, which have not been enjoyed by any other business models. Some of the examples would be MRP (Material Requirements Planning), EDI (Electronic Data Interchange) or ERP (Enterprise Resource Planning). The essential features of e-business strategies are supply chain management and email marketing. A state-of-the-art E Business Strategy would generally include: Supply Chain Management: Effective management of the supply chain can be handled with the help of e-business strategies, which will ensure better coordination between
Zahid Nazir Roll# AB523655 Page | 33

the wholesalers and the retailers of various products. Better integration of the supply chain right from the source till the final delivery of the product can be effectively implemented using e-business strategy. This also brings us to the point of e- commerce where a parallel network of buying and selling can be observed using dissemination of information over the Internet. Everything ranging from automobiles to electronic gizmos can be bought over the Internet in a hassle free manner under the aegis of sound supply chain management. Customer Service and Customer Relationship Management: Effective e-business strategies would involve better customer service and customer relationship management ensuring the highest level of consumer satisfaction. E business is targeted at providing the customerfriendly services, which would include the timely delivery of goods right at the doorstep of the consumer. Inventory and Service Management Integration: e-business strategies can also help in better inventory and service management integration through formulating specific plans for inventory accumulation and purchasing machinery and equipment which will avoid unnecessary purchases which can lead to higher expenditures entailing different tax implications. Tactical Operations Alignment: Tactical operations directed towards short-term goals as opposed to strategic planning aimed at long term goals can be better coordinated implementing the e-business strategies. E-business diverges from the traditional sphere of business by speeding up the business activities and giving a totally new dimension and definition to businesses worldwide be it whether partnerships, joint ventures or large corporations. The internet, intranet, cellular networks
Zahid Nazir Roll# AB523655 Page | 34

and other forms of digital technology have created a niche value chain among clients, employees, suppliers, stakeholders and traders coordinated in the world of web marketing. The tools and pillars of ebusiness strategies include acceptance of payments over the Internet, online advertising, on-line trading and auction deals over the Internet. E-business strategies will also differ for small and medium-sized businesses. Apart from regular sources, e-business strategies can generate revenue from maintenance of current channel integrity, revenue made from paid marketing alliances, revenues derived from franchisees and subscriptions.

Reference:
http://www.economywatch.com

**********************

Zahid Nazir Roll# AB523655

Page | 35

Question 4

a). Discuss strategies for global community building and global marketing.

b). Briefly explain how e-business helps in brand creation and positioning.

Zahid Nazir Roll# AB523655

Page | 36

a).

Global Marketing Strategies:
A global marketing strategy that totally globalizes all marketing activities is not always achievable or desirable (differentiated globalization). In the early phases of development, global marketing strategies were assumed to be of one type only, offering the same marketing strategy across the globe. As marketers gained more experience, many other types of global marketing strategies became apparent. Some of those were much less complicated and exposed a smaller aspect of a marketing strategy to globalization. A more common approach is for a company to globalize its product strategy (product lines, product designs and brand names) and localize distribution and marketing communication. Integrated Global Marketing Strategy: When a company pursues an integrated global marketing strategy, most elements of the marketing strategy have been globalized. Globalization includes not only the product but also the communications strategy, pricing and distribution as well as such strategic elements as segmentation and positioning. Such a strategy may be advisable for companies that face completely globalized customers along the lines. It also assumes that the way a given industry works is highly similar everywhere, thus allowing a company to unfold its strategy along similar paths in country by country. One company that fits the description of an integrated global marketing strategy to a large degree is Coca-Cola. That company has achieved a coherent, consistent and integrated global marketing strategy that covers almost all elements of its marketing program from segmentation to positioning, branding, distribution, bottling, advertising and more. Reality tells us that completely integrated global marketing strategies will continue to be the exception. However, there are many other types

Zahid Nazir Roll# AB523655

Page | 37

of partially globalized marketing strategies; each may be tailored to specific industry and competitive circumstances. Global Product Category Strategy: Possibly the least integrated type of global marketing strategy is the global product category strategy. Leverage is gained from competing in the same category country after country and may come in the form of product technology or development costs. Selecting the form of global product category implies that the company while staying within that category will consider targeting different segments in each category or varying the product, advertising and branding according to local market requirements. Companies competing in the multi-domestic mode are frequently applying the global category strategy and leveraging knowledge across markets without pursuing standardization. That strategy works best if there are significant differences across markets and when few segments are present in market after market. Several traditional multinational players who had for decades pursued a multidomestic marketing approach-tailoring marketing strategies to local market conditions and assigning management to local management teams- have been moving toward the global category strategy. Among them are Nestle, Unilever and Procter&Gamble, three large international consumer goods companies doing business in food and household goods. Global Segment Strategy: A company that decides to target the same segment in many countries is following a global segment strategy. The company may develop an understanding of its customer base and leverage that experience around the world. In both consumer and industrial industries significant knowledge is accumulated when a company gains in-depth understanding of a niche or segment. A pure global segment strategy will even allow for different products, brands or advertising although some standardization is expected. The choices may consist of competing always in the upper or middle segment of a given consumer market or
Zahid Nazir Roll# AB523655 Page | 38

for a particular technical application in an industrial segment. Segment strategies are relatively new to global marketing. Global Marketing Mix Element Strategies: These strategies pursue globalization along individual marketing mix elements such as pricing, distribution, place, promotion, communications or product. They are partially globalized strategies that allow a company that customize other aspects of its marketing strategy. Although various types of strategies may apply, the most important ones are global product strategies, global advertising strategies and global branding strategies. Typically companies globalize those marketing mix elements that are subject to particularly strong global logic forces. A company facing strong global purchasing logic may globalize its account management practices or its pricing strategy. Another firm facing strong global information logic will find it important to globalize its communications strategy. Global Product Strategy: Pursuing a global product strategy implies that a company has largely globalized its product offering. Although the product may not need to be completely standardized worldwide, key aspects or modules may in fact be globalized. Global product strategies require that product use conditions, expected features and required product functions be largely identical so that few variations or changes are needed. Companies pursuing a global product strategy are interested in leveraging the fact that all investments for producing and developing a given product have already been made. Global strategies will yield more volume, which will make the original investment easier to justify.

Zahid Nazir Roll# AB523655

Page | 39

Global Branding Strategies: Global branding strategies consist of using the same brand name or logo worldwide. Companies want to leverage the creation of such brand names across many markets, because the launching of new brands requires a considerable marketing investment. Global branding strategies tend to be advisable if the target customers travel across country borders and will be exposed to products elsewhere. Global branding strategies also become important if target customers are exposed to advertising worldwide. This is often the case for industrial marketing customers who may read industry and trade journals from other countries. Increasingly, global branding has become important also for consumer products where cross-border advertising through international TV channels has become common. Even in some markets such as Eastern Europe, many consumers had become aware of brands offered in Western Europe before the liberalization of the economies in the early 1990s. Global branding allows a company to take advantage of such existing goodwill. Companies pursuing global branding strategies may include luxury product marketers who typically face a large fixed investment for the worldwide promotion of a product. Global Advertising Strategy: Globalized advertising is generally associated with the use of the same brand name across the world. However, a company may want to use different brand names partly for historic purposes. Many global firms have made acquisitions in other countries resulting in a number of local brands. These local brands have their own distinctive market and a company may find it counterproductive to change those names. Instead, the company may want to leverage a certain theme or advertising approach that may have been developed as a result of some global customer research. Global advertising themes are most advisable when a firm may market to customers seeking similar benefits across the

Zahid Nazir Roll# AB523655

Page | 40

world. Once the purchasing reason has been determined as similar, a common theme may be created to address it. Composite Global Marketing Strategy: The above descriptions of the various global marketing models give the distinct impression that companies might be using one or the other generic strategy exclusively. Reality shows, however, that few companies consistently adhere to only one single strategy. More often companies adopt several generic global strategies and run them in parallel. A company might for one part of its business follow a global brand strategy while at the same time running local brands in other parts. Many firms are a mixture of different approaches, thus the term composite.

b).

E-BUSINESS IN BRAND CREATION AND POSITIONING
Plant (2000) suggests that there are four variations e-businesses may adopt as marketing strategies, all of which relate to the concept of brand image: • • • • Brand Creator Brand Reinforce Brand Follower Brand Re-positioning

These four strategies all have merits and must be assessed on the basis of the e-business strategy and the organization’s market positioning. However what is important is how the customer relationship will be managed in each of these strategies and hoe it can be measured. The
Zahid Nazir Roll# AB523655 Page | 41

term, which is normally used to measure this concept is “Brand Equity” and refers to the actual financially related value of the branding image. Coca Cola has a huge investment in brand equity as do Nike but a company supplying part-finished goods to branded suppliers has no brand equity and no need of one in these terms. The four main drivers of brand equity are: • • • • Brand name awareness Brand Loyalty Perceived quality Brand differentiation

Generally there are seven key factors which together can provide an indicator of brand strength: • • • • • • • Leadership Stability Market International scope Trend Support Protection

These suggest that a global e-business needs to develop a multicomponent strategy for the creation and protection of brand equity, focusing on brand leadership, stability and global market positioning through proactive corporate policies.

Reference:
e-BUSINESS AND THE SUPPLY CHAIN MANAGEMENT by Jorge R. León-Peña E-BUSINESS AND SUPPL y CHAIN MANAGEMENT: AN OVERVIEW AND FRAMEWORK by M. ERIC JOHNSON AND SEUNGJIN WHANG.

Zahid Nazir Roll# AB523655

Page | 42

Question 5

Briefly explain the following: • • • • E-economy New Economy Internet Economy E-Business

Zahid Nazir Roll# AB523655

Page | 43

E-ECONOMY
In this new millennium, there is a general feeling that things have changed, that there is a new social and economic reality. In particular this expectation applies to the world of business, transformed as it has been by a number of powerful forces such as globalization and the advent of the internet. There is a sense that the world of business is significantly different from its state just 20 years ago. This perspective gives rise to terms such as “new economy” , “information economy” , “digital economy” , and so on. These terms suggest, rather imprecisely, that we have a new business reality and that the role of ICT (Information & Communication Technology) and the internet are significant features, perhaps even defining features or characteristics of that new business reality. Two broad constructs help to structure and make some sense of this new reality if they are defined and thought about clearly: namely the “new economy” and the “internet economy”. This block introduces these notions as fundamental constructs for the rest of the course. There is a sense in which trends such as globalization and the effective use of increasingly more powerful and reliable ICT have transformed the national economies of the USA and Europe to such an extent that when referring to say, the contemporary US economy, we could meaningfully talk about something called the “new economy”. A separate construct refers to the economy that is clustered around the internet and the new electronic commerce or e-business phenomenon. Finally, there has been a significant restructuring of organizations, since e-business intensifies collaborations among multiple organizations with several complex economic, strategic, social and conflict management issues as well as major organizational and technological factors. This new business paradigm in one where: • Core business processes may need to be rethought and redesigned.
Zahid Nazir Roll# AB523655 Page | 44

• New organizational forms and inter-organizational forms may need to be developed. • The emphasis will be on collaboration rather than competition within the virtual market. The most fundamental elements of doing business are changing and a totally new business environment is emerging because of the phenomena such as: • • • • • The world wide web Mass customization Compressed product life cycles New distribution channels New forms of integrated organizations

In such an environment, responsive organizations quickly become virtual because the costliest parts of their infrastructure no longer lend themselves to measurement by height, length, weight or other physical dimensions. Such organizations will have a considerable impact on all aspects of business strategy in the 21st century.

*******************

NEW ECONOMY
You may ask what economic rules prevail in the ‘new economy’. There is speculation that the recent sustained boom in the US economy as instanced by increased corporate earnings and profits, low unemployment, relatively high productivity, low inflation and a soaring stock market has made that economy ‘new’ in the sense that some of the old economy rules and principles no longer apply, at least with the force. Amidst such speculation is a view that stronger productivity
Zahid Nazir Roll# AB523655 Page | 45

growth now allows the US economy to grow faster without inflationary pressures. There is also the view that in the short run, a trade-off between inflation and unemployment has changed so that low unemployment and low inflation can coexist. Other speculation looks at the sources of growth in the US economy and identifies factors such as computerization and globalization as driving forces changing the nature of the old economy. Connected to the pre-eminent role given to IT and its potentially transforming power has been the important role given to knowledge as a new form of capital, along with the roles of knowledge management, research and innovation as factors creating wealth. Another feature of the ‘new economy’ is the increasingly important role of the service sector. Indeed, Pine and Gilmour (1999) see the ‘service economy’ evolving into what they call an ‘experience economy’. They trace the evolution of economies from an agrarian-based economy through an industrial economy through to a service economy and thence to the emergence of an experience economy. Each economic stage has all the elements of preceding and succeeding stages, but the focus and emphasis is different. The contemporary economies of the developed world can be seen to be new in terms of their emphasis on producing and delivering services and the emerging idea of staging complete experiences for consumers. Of course, modern new economies examined along this plane are only different in degree from the older economies of 20 years ago, but this difference in degree could be seen as a ‘strand of newness’ in the ‘new economy’. As you already notice, the nature of the new economy has many and varied aspects of novelty. Throughout the course, your readings will show that these are given different degrees of emphasis by different thinkers. Economies are examining the new IT-based organizations and the economic world they shape but have come to no agreement yet on whether there are new economic laws to be discovered, or whether the
Zahid Nazir Roll# AB523655 Page | 46

old economy macroeconomic principles and technical relationships still apply. For some it is a given that, while technology may change, economic laws do not. Perhaps no definite views are yet possible. As you will see, the potential for new business and organizational forms resulting from a still-developing set of technologies has yet to be properly mapped out, and we are still learning. The term ‘information economy’ has come to mean the broad, long-term trend toward the expansion of information- and knowledgebased assets and value relative to tangible assets and products associated with agriculture, mining, and manufacturing. The term ‘ digital economy’ refers specifically to the recent and still largely unrealized transformation of all sectors of the economy by the computerenabled digitization of information. (Brynjolfsson and Kahin, 2000)

*****************

INTERNET ECONOMY
Another definition of ‘information economy’ or ‘digital economy’ is the “Internet economy”. This notion revolves around the set of internetbased organizations, the ‘dot-coms’ and others involved in e-commerce. An explicit characterization of the ‘internet economy’ is provided by a group of researchers at the University of Texas at Austin’s Center for Research in Electronic Commerce. They view the ‘internet economy’ as those firms engaged in e-commerce together with those firms that provide, implement and maintain the infrastructure for e-commerce. They see the ‘internet economy’ as a structure with four layers: Layer 1 Layer 2 Layer 3 The internet infrastructure indicator The internet applications infrastructure indicator The internet intermediary indicator
Page | 47

Zahid Nazir Roll# AB523655

Layer 4

The internet commerce indicator

Layer 1 The Internet Infrastructure Indicator This consists of the telecommunications companies, Internet Service Providers, Internet Bachbone Carriersd, ‘last mile’ access companies, security vendors and manufacturers of end-user networking equipment all of which are prerequisites for the Web and proliferation of internetbased electronic commerce. Examples of companies include Cisco, Lucent, Dell, AOL, Axent and Corning.

Layer 2 The Internet Applications Infrastructure Indicator This consist of the software products and services necessary to facilitate Web transactions and transaction intermediaries. It includes the consultants and service companies who design , build and maintain all types of web sites from portals to full e-commerce sites. Examples of companies include Netscape, Microsoft, Adobe, Opera, Oracle and Macromedia.

Layer 3 The Internet Intermediary Indicator This consists of intermediary services such as web development, electronic market makers or market intermediaries. Essentially they facilitate the meeting and interaction of buyers and sellers over the internet and act as catalysts in the process through which investments in the infrastructure and application layers are transformed into business transactions. Examples of companies includes VerticalNet, E8trade, Travelweb.com, Zdnet, Yahoo, DoubleClick. Layer 4 The Internet Commerce Indicator This consists of all companies conducting e-business across a wide variety of vertical industries (excluding those already included in Layer 3). Examples of companies include e-tailers, manufacturers selling
Zahid Nazir Roll# AB523655 Page | 48

online, free-subscription-based companies, airlines selling online tickets, online entertainment and professional services. These four layers comprise a complete e-economy with characteristics such as inputs, outputs, size, value added, efficiency and labor productivity. Table below shows the growth experienced in each year from 1998-1999 and overall revenues in US$ billions.
1998 %Growth Layer 1 Layer 2 Layer 3 Layer 4 Annual revenues 27 14 11 16 64 $301 1999 % Growth 40 22 17 37 108 $507 Growth Overall 50 61 52 127 68

The internet economy is growing at a very fast rate, but a realistic assessment of its growth rate is only possible if you understand the different component parts and can measure separate results over time to tie these into policy decisions.

********************

E-BUSINESS
Laudon and Traver have defined e-Business as “the digital enablement of transactions and processes within a firm, involving information systems under the control of the firm, which doesn’t include the company’s revenue”. For example, a company’s inventory management system and warehousing do not affect its revenue directly, such as its sales strategies and models. It comes under the domain of e-Business.
Zahid Nazir Roll# AB523655 Page | 49

However e-commerce does affect revenue. By these points of view, it seems that a firm’s e-Business system can also support e-Commerce for external value exchange. Although e-Business has been defined as an electronic information management system for a company’s internal needs, some people still think the scope of e-Business transactions should cover e-Commerce. e-Business is used to manage a firm’s internal information. However, in order to be effective e-Business also needs to be supported by huge amounts of external information. In this instance, a manufacture’s inventory management needs to know from its suppliers the timeline for putting the materials on the production line. On the other hand, the production time-line relates to the products’ shipment date. Then those solutions extend to the customers and customers’ customers and complete the business. By this theory, eCommerce could be seen as the rear end of e-Business. Given this point of view, it does not only make e-commerce’s field smaller, it makes eCommerce a part of e-Business. People are still arguing about the definition of e-Business and e-Commerce, but from each of their incidence, it seems that e-Business is bigger than e-Commerce. This paper would support the view that e-Commerce is part of wider eBusiness applications. There are several types of business methods in today’s e-business copes, such as • Business-to Consumer (B2C) • Business-to-Business (B2B) • Consumer-to-Consumer (C2C) • Peer-to-Peer • Mobile, or m-Commerce Reference:
Management Information Systems (AIOU)

*******************

Zahid Nazir Roll# AB523655

Page | 50

You're Reading a Free Preview

Download
scribd
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->