Assignment: Internal Organizational Needs

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Assignment: Internal Organizational Needs

Assignment: Internal Organizational Needs

Evolution of Information Resources The Eras model (Figure 2.1) summarizes the evolution of information resources over the past six decades. To think strategically about how to use information resources now and in the future within the firm, a manager must under- stand how the company arrived at where it is today. This model provides a good overview of trends and uses that have gotten the company from simple automation of tasks to extending relationships and managing their business ecosystems to where it is today.

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IS strategy from the 1960s to the 1990s was driven by internal organizational needs. First came the need to lower existing transaction costs. Next was the need to provide support for managers by collecting and distributing information followed by the need to redesign business processes. As competitors built similar systems, organi- zations lost any advantages they had derived from their IS, and competition within a given industry once again was driven by forces that existed prior to the new technology. Most recently, enterprises have found that social IT platforms and capabilities drive a new evolution of applications, processes, and strategic opportunities that often involve an ecosystems of partners rather than a list of suppliers. Business ecosystems are collections of interacting participants, including vendors, customers, and other related parties, acting in concert to do business.3 In Eras I through III, the value of information was tied to physical delivery mechanisms. In these eras, value was derived from scarcity reflected in the cost to produce the information. Information, like diamonds, gold, and MBA degrees, was more valuable because it was found in limited quantities. However, the networked economy beginning in Era IV drove a new model of value—value from plenitude. Network effects offered a reason for value derived from plenitude; the value of a network node to a person or organization in the network increased when others joined the network. For example, an e‐mail account has no value without at least one other e‐mail account with which to communicate. As e‐mail accounts become relatively ubiquitous, the value of having an e‐mail account increases as its potential for use increases. Further, copying additional people on an e‐mail is done at a very low cost (virtu- ally zero), and the information does not wear out (although it can become obsolete). As the cost of producing an

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