Chp01

New Business Models-

IT Innovations, Complimentary Assets, E Commerce Business Models.
A growing trickle of viewers are unplugging from cable and using only the Internet for entertainment.
Research indicates that firms that support their technology investments with investments in complementary
assets, such as new business models.

Complementary assets are those assets required to derive value from a primary Investment. Research indicates
that firms that support their technology investments with investments in complementary assets. Like-from
automobiles require substantial complementary investments in highways, roads, gasoline stations, repair facilities,
and a legal regulatory structure to set standards and control drivers. Such as new business models, new business
processes, management behavior, organizational culture, or training, receive superior returns, whereas those firms
failing to make these complementary investments receive less or no returns on their information technology
investments. Then it’s called organizational and management capital.

Management Changes The management of business firms has changed: Managers on the move are in direct,
continuous contact with their employees. Having online, nearly instant access to the really important information
they need for accurate and timely decisions. With new mobile smartphones, high-speed wireless Wi-Fi networks,
and tablets on the road are only seconds away from their managers’ questions and oversight. In addition to their
public uses on the web, social networking tools, wikis, and blogs are becoming important corporate tools for
communication, collaboration, and information sharing.
Changes in Firms and Organizations
To the extent organizations and business firms demonstrate these characteristics, EE are twenty-first century digital
firms. Compared to industrial organizations of the previous century, new fast-growing twenty-first-century business
firms put less emphasis on hierarchy and structure and more emphasis on employees taking on multiple roles and
tasks and collaborating with others on a team.
They put greater emphasis on competency and skills rather than position in the hierarchy.
They emphasize higher-speed and more-accurate decision making based on data and analysis.
They are more aware of changes in technology, consumer attitudes, and culture.
They show a better understanding of the importance of information technology in creating and managing
business firms and other organizations.

The Emerging Digital Firm IAS (is a product), IT (is a component)

digital firm is one in which nearly all the organization’s significant business relationships with customers,
suppliers, and employees are digitally enabled and mediated.
Digital firms sense and respond to their environments far more rapidly than traditional firms, giving them
more flexibility to survive in turbulent times.
Core business processes are accomplished through digital networks spanning the entire organization or
linking multiple organizations. (Leave Application & Internal Relationship)
Key corporate assets—intellectual property, core competencies, and financial and human assets—are
managed through digital means. Manage machine systematically.
Time shifting refers to business being conducted continuously, Space shifting means that work takes
place in a global workshop as well as within national boundaries. Work is accomplished physically
wherever in the world it is best accomplished.

 Growing interdependence
There is a growing interdependence between a firm’s ability to use information technology and its ability to
implement corporate strategies and achieve corporate goals. What a business would like to do in five years
often depends on what its systems will be able to do. Increasing market share, becoming the high-quality or
low-cost producer, developing new products, and increasing employee productivity depend more and more on
the kinds and quality of information systems in the organization. The more you understand about this
relationship, the more valuable you will be as a manager.

Strategic Business Objectives of Information Systems (Invest heavily IS)

Operational excellence- Businesses continuously seek to improve the efficiency of their operations to
achieve higher profitability. Changes in strategy, rules and business processes increasingly require
changes in hardware, software & telecommunications. Walmart- Most efficient retail store in world as
result of digital links between suppliers and stores
New products, services, and business models- Information systems and technologies enable firms to
create new products, services, and business models. Innovation of product or need to add something on
External products. A business model Describes how a company produces, delivers or service to create
wealth. Apple- Transformed old model of music distribution with iTunes, iPad, iPhone. Virtual Intrigration-
Depending on outstanding most of the other pants positive by outsider. Vertical Intrigration-If a company produce each & every pant by itself for

assembly products

Customer and supplier intimacy- The more business engages its suppliers, the better the suppliers can
provide vital inputs. It’s essential to build a strong relationship between customers, vendors and suppliers.
Close relationships with suppliers result in lower costs. JC Penney uses IT to enhance relationship with
supplier in Hong Kong.
Improved decision making- Quality of decision will be approved. Decision is an indicate of choosing the
best among alternatives. Evaluate options by cost calculating. Information should be quality to make
decisions. A digital dashboard helps management view and monitor hiring status in multiple locations,
such as the number of open positions and the time taken to fill these positions.
Competitive advantage- Advantage over competitors. When firms achieve one or more of these business
objectives—operational excellence; new products, services, and business models; customer/supplier
intimacy; and improved decision making—chances are they have already achieved Competitive
Advantage. Charging less for superior products, better performance and better response to suppliers and
customers.
Survival- Businesses may need to invest in information systems out of necessity; it is simply the cost of
doing business. Firms turn to information systems to provide the capability to respond to record
management requirements.

KEYWORDS
Marketing- is all about communication, Traditional Market Area-Newspaper, lift let (No feedback option from customer)
Digital Market Area-Maintain Relationship (feedback option from customer), Core Business-Leave Apply /Internal Relation
Add Extra value rather than cost for invest- 1st priority, CBI- Cost Benefits Information (Main reason for any firm investing in IT)
 Information System
System can’t be single components. System should be multiple components. All components should be work
together.
When all components work together to achieve a goal is called system. Like- Human body fuction.
Objective of system is generates information.
Data is the raw version of the informations which doesn’t have sense to others.
Information is which makes sense to others. Raw data or proceed data.
Combination of collecting internal & external informations to achieve your marketing goal is called Information
System. Multiple components should be there & all components work together.