Strategic Use of

Information Technology in
the Digital Economy
ITATB Module 1
By the end of this module…
• Characterize digital economy and e-business.

• Recognize the relationships between business pressures,

organizational responses, and information systems.

• Identify major pressures in the business environment and

describe the major organizational responses to them.

• Define computer-based information systems and information

technology.
By the end of this module…
• Describe the role of information technology in supporting the
functional areas, public services, and specific industries

• List the new technology development in the areas of generic

and networked computing and Web-based systems.

• Understand the importance of learning about information

technology.
 Digital Smart City
Economy

e- Internet
IT and
Commerce transactions
business

Internet of e-
Things Government
Preliminaries
Electronic Commerce business transactions done electronically
primarily over the Internet

Networked Computing infra that supports electronic commerce

Global Networked Internet/Intranet/Extranet

Environment
IT collection of computing systems used by
an organization
 Digital Economy
convergence of computing and communication technologies on the Internet and
other networks, and the resulting flow of information and technology that is
stimulating e-commerce and vast organizational change
Source: Turban, McLean, Wetherbe (2004)
Old vs. New Economy: Taking Photos
Old Economy New Economy
1. Buy film in a store 1st Generation Digital Photography
2. Load your camera • Old economy except 6 and 7 were
3. Take pictures replaced by using a scanner and
emailing.
4. Take roll of film to store for
2nd Generation Digital Photography
processing • Use a Digital Camera, no film, no
5. Pickup the film when ready processing.
6. Select specific photos for 3rd Generation Digital Photography
enlargement • Your Digital Camera is now your
7. Mail to family and friends mobile phone, in your binoculars or a
palmtop computer.

Source: Adopted from Turban, McLean, Wetherbe (2004)

Changing a linear supply chain to a hub

Source: Turban, McLean, Wetherbe (2001)

Advantages of Digital Economy
***

Lower cost
Better quality
Faster transactions
Strategic competitive advantage
Better customer service
Business model
how a company can earn money
Business Pressures,
Organizational Responses,
and Role of IT
Source: Turban, McLean, Wetherbe (2001)
Source: Turban, McLean, Wetherbe (2001)
Business Pressures
Source of Pressure Manifestations/Descriptions
Market • Global economy and strong competition (accelerated
integration)
• Need for real-time operations (fast decision-making)
• Changing nature of workforce (more inclusive,
knowledge-based workers)
• Powerful customers (sophisticated, customized, CRM)
Technology • Technological innovation and obsolescence
• Information overload
Societal • Social responsibility
• Government regulation and deregulation
• Terrorist attacks and protection
• Ethical issues
Source: Adopted from Turban, McLean, Wetherbe (2001)
Organizational Responses
1. Strategic Management and Systems
2. Customer Focus
3. Continuous Improvements
4. Restructuring Business Processes
5. Make-to-Order and Mass Customization
6. Business Alliances
7. electronic business and e-commerce

Source: Turban, McLean, Wetherbe (2001)

Information Systems
• collects, processes, stores, analyzes, and disseminates
information for a specific purpose

• formal and informal information systems

• computer-based information system

Source: Turban, McLean, Wetherbe (2001)

Information Systems

Source: Turban, McLean, Wetherbe (2001)

Components of Information Systems

Hardware Software Database Network

Procedures People Purpose Social

Context

Source: Adopted from Turban, McLean, Wetherbe (2001)

IT-supported Responses
Information Systems
Accounting Software
IT-powered Basketball
Operations
Interactive menus and
food delivery
Source: Adopted from Turban, McLean, Wetherbe (2001)
Critical Response Activities Supported
decision making, managing large amounts of
information, improved quality, reduced cycle
time, enhanced strategic competitiveness
decision making, increased sales, improved
customer service, improved inventory
management, better utilization capacity
improved customer service, improved cycle time,
innovative marketing method
Networked and Distributed Computing
• Unprecedented level of collaboration
• Metcalfe’s Law
• Information superhighway
• Intranet and Extranet
• Mobile computing and m-commerce
• Pervasive computing
• Corporate portals/networked enterprise
Why study IT?
• IT is a facilitator of organizational activities and processes.

• IT knowledge enables you to be more flexible professionally.

• IT creates numerous opportunities.

• IT affects/changes/revolutionizes business core functions:

marketing, financial, human resource, logistics…
Source: https://datareportal.com/global-digital-overview
10 Breakthrough Technologies 2020
MIT Technology Review
Technology Why it matters?
1. Unhackable the Internet is increasingly vulnerable to hacking; a quantum one
Internet would be unhackable
2. Hyper- genetic medicine tailored to a single patient means hope for
personalized people whose ailments were previously uncurable
medicine
3. Digital money as the use of physical cash declines, so does the freedom to
transact without an intermediary. Meanwhile, digital currency
technology could be used to splinter the global financial system
4. Anti-aging drugs number of different diseases, including cancer, heart disease,
and dementia, could potentially be treated by slowing aging
5. AI-discovered commercializing a new drug costs around $2.5 billion on average.
molecules One reason is the difficulty of finding promising molecule
10 Breakthrough Technologies 2020
MIT Technology Review
Technology Why it matters?
6. Satellite mega- These systems can blanket the globe with high-speed
constellations internet—or turn Earth’s orbit into a junk-ridden minefield

7. Quantum supremacy Eventually, quantum computers will be able to solve problems

no classical machine can manage

8. Tiny AI Our devices no longer need to talk to the cloud for us to

benefit from the latest AI-driven features

9. Differential privacy A technique called differential privacy could solve the problem
of keeping private data and build trust

10. Climate change Providing a clearer sense of how climate change is

attribution worsening the weather, and what we’ll need to do to prepare
Questions for Discussions
1. Discuss the motivation for becoming an e-business.
2. Review the examples of the new versus the old economy
cases. In what way did IT make the difference?
3. Explain why IT is a business pressure and also an enabler of
response activities that counter business pressures.
4. Why is m-commerce perceived as being able to increase EC
applications?
5. Is IT a strategic weapon or a survival tool? Discuss.
6. It is said that networked computing changes the way we live,
work, and study. Why?