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42 Part One Organizations, Management, and the Networked Enterprise

Key corporate assets—intellectual property, core competencies, and financial
and human assets—are managed through digital means. In a digital firm, any
piece of information required to support key business decisions is available at
any time and anywhere in the firm.
Digital firms sense and respond to their environments far more rapidly than
traditional firms, giving them more flexibility to survive in turbulent times.
Digital firms offer extraordinary opportunities for more flexible global organiza-
tion and management. In digital firms, both time shifting and space shifting are
the norm. Time shifting refers to business being conducted continuously, 24/7,
rather than in narrow “work day” time bands of 9 a.m. to 5 p.m. 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.
Many firms, such as Cisco Systems, 3M, and IBM, are close to becoming
digital firms, using the Internet to drive every aspect of their business. Most
other companies are not fully digital, but they are moving toward close digital
integration with suppliers, customers, and employees. Many firms, for example,
are replacing traditional face-to-face meetings with “virtual” meetings using
videoconferencing and Web conferencing technology. (See Chapter 2.)

STRATEGIC BUSINESS OBJECTIVES OF INFORMATION
SYSTEMS

What makes information systems so essential today? Why are businesses
investing so much in information systems and technologies? In the United
States, more than 21 million managers and 154 million workers in the labor
force rely on information systems to conduct business. Information systems
are essential for conducting day-to-day business in the United States and most
other advanced countries, as well as achieving strategic business objectives.
Entire sectors of the economy are nearly inconceivable without substantial
investments in information systems. E-commerce firms such as Amazon, eBay,
Google, and E*Trade simply would not exist. Today’s service industries—
finance, insurance, and real estate, as well as personal services such as travel,
medicine, and education—could not operate without information systems.
Similarly, retail firms such as Walmart and Sears and manufacturing firms such
as General Motors and General Electric require information systems to survive
and prosper. Just as offices, telephones, filing cabinets, and efficient tall build-
ings with elevators were once the foundations of business in the twentieth
century, information technology is a foundation for business in the twenty-first
century.
There is a growing interdependence between a firm’s ability to use informa-
tion technology and its ability to implement corporate strategies and achieve
corporate goals (see Figure 1.2). 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.
Specifically, business firms invest heavily in information systems to achieve
six strategic business objectives: operational excellence; new products, services,
and business models; customer and supplier intimacy; improved decision
making; competitive advantage; and survival.

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