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Information systems todayManaging in the digital world
Chapter 1: Managing in the digital world
Information systems today
Today, computers – the core components of information systems (IS) – are ubiquitous. Over the past
decades, the advent of powerful, relatively inexpensive, easy-to-use computers has had a major impact
on business.
Post-PC era: wireless, mobile devices allow for novel ways of interacting with information systems. Yet,
desktop personal computers (PCs) and laptops are unlikely to go away. Changes in technology have
enabled new ways of working and socializing. Computing has changed from an activity primarily focused
on automating work to encompass various social and casual activities. In effect, we are in a virtuous
cycle, where changes in technology enable social changes, and social changes shape technological
changes. In addition, the boundaries between work and leisure time are blurring.
Knowledge worker (according to Drucker): professionals who are relatively well educated and who
create, modify and/or synthesize knowledge as a fundamental part of their jobs. With the growth in the
number of knowledge workers and with their rise in importance and leadership, a knowledge society
would emerge: given the importance of education and learning to knowledge workers and the firms that
need them, education would become the cornerstone of the knowledge society. Possessing knowledge
would be as important as possessing land, labor or capital.
Digital world: knowledge society, knowledge economy, new economy, digital society, network era,
Internet era. -> information and related technologies and systems have become very important to us
and knowledge workers are vital. Many ‘traditional’ occupations now increasingly use information
technologies.
There is a downside to overreliance on information technology, but one thing is for certain: knowledge
workers and information technologies are now critical to the success of modern organizations,
economies and societies.
The rise of the Information Age
Three distinct phases, or ‘waves of change’, that have taken place in the past or are presently taking
place within the world’s civilizations (Alvin Toffer, in The Third Wave):
1. A civilization based on agriculture and handwork: a comparatively primitive stage that replaced
hunger-gatherer cultures and lasted for thousands of years.
2. Industrial revolution: overlapped with the first wave. Began in Great Britain toward the end of
the 18th century and continued over the next 150 years, moving society from a predominantly
agrarian culture to the urbanized machine age.
3. Information age: a period of change. As the third wave gained speed, information became the
currency of the realm.
,Five IT megatrends in the Information Age
Today, in most developed societies, information technologies have become pervasive – information
technologies are in fact used throughout society. Five IT megatrends in the Information Age:
1. Mobile -> one of the biggest trends we’re seeing today in a post-PC era is the move toward
mobile devices. For organizations, this increase in mobility has a wide range of implications,
from increased collaboration to the ability to manage a business real-time (anytime, from
anywhere) to changes in the way new customers can be reached.
2. Social media -> Facebook, Twitter, Youtube, Google+, Wikipedia, LinkedIn
3. Big data -> the transformation of our social and work interactions enabled by 24/7 connectivity
has given rise to Big Data. Organizations are continuously seeking to get the right information to
make the best business decisions. The rise of social media has further increased the amount of
unstructured data available to organizations. For many organizations in the information age,
value is created from data. However, analyzing tremendous amounts of data poses tremendous
challenges for organizations.
4. Cloud computing -> Web technologies enable using the Internet as the platform for applications
and data. Much of the functionally previously offered by applications installed on each
individual computer is offered by applications ‘in the cloud’ accessed via your Web browser. In
fact, many regard cloud computing as the beginning of the ‘fourth wave’. Cloud computing has
made inroads in a variety of organizational applications, and many organizations rely on an
information systems infrastructure in the cloud.
5. Consumerization of IT -> fueled by societal changes, many technological innovations are first
introduced in the consumer marketplace, before being used by organizations. Furthermore,
today’s employees are increasingly using their own devices for work-related purposes, or are
using software they are used to in the workplace. Managing the trend of ‘bring your own device’
(BYOD) is a major concern of business and IT managers alike.
What do these megatrends mean for today’s workforce?
Being able to use information systems, to assess the impacts of new technologies on one’s work
or private life and to learn new technologies as they come along will be increasingly important
skills.
Knowing how to use a computer – called computer literacy (or information literacy) – can mean
the difference between being employed and being unemployed.
Computer-related occupations have evolved as computers have become more sophisticated and
more widely used.
Many argue that computer literate is not sufficient in today’s world -> computer fluency – the
ability to independently learn new technologies as they emerge and assess their impact on your
work and life – is what will set you apart in the future.
IT has enabled globalization: the integration of economies throughout the world, fundamentally
changing how not only people but also organizations and countries interact.
Evolution of globalization
A more global and competitive world spurs visible economic, cultural, and technological changes:
Economic changes -> increases in international trade, in the development of global financial
systems and currency, and in the outsourcing of labor.
Cultural changes -> increases in the availability of multiculturalism through television and
movies, frequency of international travel, tourism, and immigration.
, Technological changes -> development of low-cost computing platforms and communication
technologies.
Over the past centuries, globalization, enabled by innovation and technological progress, has come a
long way.
The rise of information systems outsourcing
Downsizing (rightsizing): many organizations are looking for ways to streamline business functions and
to slash costs and replace people. Often, these organizations try to use the IS function for doing more
with less. One phenomenon that has been a huge increase because of the decrease in
telecommunication costs is outsourcing, both onshore (domestically) and offshore.
Companies are choosing to outsource business activities for example these reasons: reduce or control
costs, free up internal resources, gain access to world-class capabilities, reduce time to market, to be
able to focus on core activities, to compensate for a lack of specific capabilities or skills.
Outsourcers are constantly looking at nascent and emerging countries. However, offshore outsourcing
does not always prove to be the best approach for an organization.
Opportunities of operating in the digital world
Globalization has opened up many opportunities, brought about by falling transportation and
telecommunication costs. The increasing globalization has moved cultures closer together -> ‘global
village’.
Opportunities for reaching new markets
After the fall of communism in Eastern bloc countries and the rise of a new middle class in China, new
markets opened up for countless companies.
Opportunities of a global workforce
With the decrease in communication costs, companies can now draw on a large pool of skilled
professionals from all over the globe.
Challenges of operating in the digital world
Governmental: political system, regulatory, data sharing, standards, internet access and
individual freedom
Geoeconomic: time zone differences, infrastructure-related reliability, differences in welfare,
demographic, expertise
Cultural: working with different cultures, challenges of offering products or services in different
cultures.
Key players
Infosys and Wipro are two global giants in the information systems area; both companies work to
improve business efficiency by providing consulting and IT services, bringing offshore outsourcing to
another level with their fast-expanding networks and growing patronage.
Information systems defined
Information systems: combinations of hardware, software and telecommunications networks that
people build and use to collect, create and distribute useful data, typically in organizational settings.
Hardware: physical computer equipment -> computer monitor, central processing unit.
Software: a program of set of programs that tell the computer to perform certain tasks.
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