Information Technology: Its Impact on Business Education

Presented by

Frederick H. Wu, Ph.D., CMAEmeritus Professor

University of North Texas

October 30, 2009

All the Business exists to create “Value”

I am confident that we will rise to the challenge of deliveringfor our shareowners and customers in 2009. ---Verizon Communications 2008 Annual Report

We remain committed to growing long-term value to our Shareholders… ---ExxonMobil 2007 Annual Report

Service is more robust in a downturn because it create value for our customers. Service value for our customers comes from two Streams: customer efficiency thru system performance and…; andCustomer productivity thru process improvement and data manage-ment. ---General Electric 2008 Annual Report

Value Creation

Innovation Cycle Operation Cycle Post Sales Service Cycle

Identify theMarket

Create theProduct/Service

Build Product/Service

Deliver Product/Service

ServiceTheCustomer

Customer NeedIdentified

Resources: Fixed Assets; Human Assets; Intangible Assets Costs

Revenues

Profit

Value to Customers

Value to Suppliers

ValueToStock-Holders& Society

Interfaced by Information Technology

Top Priorities for Business in Today’s Changing Landscape:

1. Strategies for driving growth

2. Methods for managing talents

3. Ideas for improving relationships with customers and suppliers

BusinessWeek, March 23 & 30 2009

Corporate Strategies

Strategy as a Position

• Cost leadership (efficiency)

Examples: Wal-Mart, Kia, Dell

• Product leadership (differentiating):– Higher qualities (endurance, safety, timely delivery,

reliability, after-sales services, etc.)

Examples: Toyota, Starbucks, Google

• Unique products through innovation (Blue Ocean)Wines (Yellow Tail)

Relationship between Business Processes, Information Processes, and Management Processes: Business Model

Acq./PmtProcess

Sell/CollectProcess

ConversionProcess

Plan

Management Processes

Execute

Control

Evaluate

MaintainData

Capture Data

Information System

Management of Business Processes

Provide Information

Management Control SystemSuppliers

Mar

ket

OperationalProcesses

Goals and Strategy

Supporting Processes: Human resources, Financing, Research & development, etc

Organizational structure

Culture

Communication System

Support Processes

“Investing in the IT that Makes a Competitive Difference”In Harvard Business Review, by McAfee and Brynjolfsson,July-August 2008:

1. The link between technology and competition has become much stronger since the mid-1990s.

2. Information technology such as the internet and enterprise software applications (ERP, CRM, SRM, enterprise content management (ECM) became practical tool for business.

“Information Technology Capability: Firm Valuation, EarningsUncertainty, and Forecast Accuracy,” in Journal of InformationSystems, Fall 2007

IT capability is positively associated with future earnings Uncertainty…

“An Empirical Study of the Organizational Impact of Effective Information Technology Deployment,” in“International Journal of Management Theory and Practices,”By Wilfred Wu et al., August 2005

When IT applications and business strategy havea good fit, it contributes to a firm’s financialperformance significantly.

IT Architecture

• Definition: “The blueprint of a firm’s IT architecture defines the technical computing, information management, and communications platform.”

Components of IT Architecture

Value – Creating Business OpportunitiesCommerce Content Community

Value – Enabling IT Infrastructure

Solutions and Services

• Enterprise Resource Planning (e.g., SAP and People Soft)• Supply chain management

• Internet service providers• Systems integration services • Outsourcing and hosting

Software Productivity and Development Tools• Packages (Word processing, spreadsheets, e-mail package, etc.)• Programming Languages (C++, Visual Basic, Cobol, Basic, etc)

Computing Communications• Hardware (computers, printers, etc) • Operating systems• Database management systems• Document management systems

• Hardware (networks, routers, etc.)• Network Operating systems• Gateways• E-mail and file transfer services

Implications for Business Education

• As a proficient knowledge worker, a student should, first of all, have a broad understanding of how firm works to create value for stakeholders: a successful “business model.”

• As a PKW, a student should develop his/her specialization coupled with a good IT skills.

Implications

• To understand how firm works to create value, a student take the following required business core courses: Accounting (6 hours) Finance (3 hrs) and investment/commodity future (3 hrs) Marketing (3 hours) Management (behavioral and quantitative: 6 hours) MIS (6 to 9 hrs) Ethics (1-3 hrs) Policy and Strategy (strategic management: 3 hrs) Economics (6 hrs)

Implications

As a PKW, a student should develop the following skills:

LeadershipCommunications (oral and written)Ability to work in a team or groupHigh level of analytical abilityMulti-language (global business: The World is Flat)Professionalism/work ethicsLearn to learn

Implications

We, Professors, should adopt the following for teaching:

1. Use case approach to allow students to make presentations and participate in discussion in class2. Use group learning approach in class to allow students to learn listening, cooperation, and leadership abilities3. Ability to speak well in presentation or class discussion is a part of the course grade, in addition to the written report.4. Use IT to enhance real-time interaction with students.

Implications – continued

Pursue the following career paths:

Accounting firms:

• Systems audit

• IT consultant

Industries/corporate firms:

• Operations Analyst

The End