Managing Information Systems for Effective Organizational Operations

FB5003 - Seminar 1 Information Systems for Managers Introduction 1

Mini-Bio of Myself 30+ Years in HK. Teaching non-technical IS courses to MSc and MBA students Research methods courses to PhD and DBA students My research involves How employees break the rules and work around systems Virtual work and how it affects individuals and teams Digital Transformation of processes, people, organisations Web http://www.is.cityu.edu.hk/staff/isrobert Email isrobert@cityu.edu.hk 2

You and Us What are your expectations for this course? What do you hope to learn? What is your preferred learning style as learning partners? What is your IS/IT background? Don t say none because you all have a mobile phone, you all use an octopus card, and you probably all bought goods or services on the Internet! What is a reasonable policy with regard to your participation and focus in class? I will give credit for participation so please share your ideas Can I trust you not to use your devices to read/send messages, make calls, browse the web - except as necessary for in-class activities? What about attendance? The syllabus specifies 70% - that s 6 classes or so. Arriving late is better than not arriving at all! 3

Todays Introductory Agenda Information & Information Systems Some (popular) examples of situations where IS are involved, including: failures, ransomware, blockchain, cloud computing, e- commerce, digital enablement (in developing countries) Consider the role of culture in IS Some general principles for this course Assessment exam and coursework 4

Information Information is critical to us as individuals, as well as to organisations Without information, business would be impossible Anything Internet-related depends on information So, systems that help us manage information are also rather important 5

What Kind of Systems? All organisations operate through and are dependent on systems Ordering supplies, tracking inventory, manufacturing, locating customers, selling goods, hiring and paying employees, handling auctions, coordinating supply chains, etc. Spying, enabling, monitoring, restricting, facilitating, disrupting, All systems are premised on information flows about designs, products, orders, shipments, finances, stories, people These systems can integrate and align different parts of an organisation, locally and globally. 6

So, an Information System is An integrated set of computer-based components that can be used to analyse data, and deliver information to support people in their operations, management, and decision-making functions in a personal or organisational context. 7

Information System Components Hardware Software Databases Decision models Procedures Management Communications Information People 8

Do People Still Talk about Systems? The more common terms seem to be: Apps (ubiquitous on mobile devices) Solutions/Services (consultants preference) Is the ideas of systems too scary, complex, remote? Does it matter what terms we use so long as we understand what we are talking about? Are IS so deeply embedded that they effectively disappear? IS are everywhere but their quality/resilience varies Mobile payments, ticketing, shopping, games, phones 9

When Systems Lack Resilience they fail British Airways cancelled all flights from LGW and LHR due to IT failure May 27th, 2017 Severe Disruption to Global Operations Estimated Cost: 100 Million https://www.theguardian.com/world/2017/may/27/british- airways-system-problem-delays-heathrow 10

Maersk $300 Million of loss and two weeks of disruptions The unprecedented attack forced workers to improvise with Twitter, WhatsApp and Post-It notes as they struggled to get goods moving from ships to shore again http://www.latimes.com/business/la-fi-maersk-cyberattack- 20170817-story.html 11

Kaseya Kaseya, an IT solutions developer for (~50) Managed Service Providers (MSPs) and (~800-1500 enterprise clients), suffered a ransomware attack on 2-7-2021 all unable to access their systems The attackers bypassed authentication controls, gained an authenticated session, uploaded malicious software, and executed commands Customers were notified of the breach via email, phone, and online notices. The attack was from the REvil/Sodinokibi ransomware group 12 https://www.zdnet.com/article/updated-kaseya-ransomware-attack-faq-what-we-know-now/

CrowdStrike CrowdStrike is a cybersecurity company that protects its customers from cyber attacks On 19th July 2024, CrowdStrike delivered a faulty update to its security software that runs on MS Windows 8.5 million servers crashed, disrupting daily life, businesses, governments, hospitals, etc. Damage is estimated at US$10 billion https://en.wikipedia.org/wiki/2024_CrowdStrike_incident 13

Cloud-Based Information Systems Cloud computing customers generally do not own the physical infrastructure Customers reduce capital costs by renting resources (hardware, software, network bandwidth) from a third-party provider and pay only for what they use. Customers can be billed on a subscription basis (like electricity, water) Major Cloud Providers Microsoft, IBM, HP, Amazon, Google, Aliyun, Baidu, Cloud providers can also be hit by ransomware attacks! 14

Cloud Components SaaS Software as a Service Office, analytical or enterprise software Purchasing, sales, project management, Email PaaS Platform as a Service Application design or development E-business hosting, Team collaboration IaaS Infrastructure as a Service Hardware, netware, storage, 15

Why Use Clouds? A key motivation is cost It can save a lot of money Rent software, networks as you need them Store data without the trouble of maintaining the hardware Outsource non-core activities Let other people do it better and cheaper P&G saved US$800M over 7 years by outsourcing basic IT services to the cloud 16

Value and Opportunity in the Cloud McKinsey reports that the F500 companies will have over US$1 trillion of cloud value by 2030. For the F2000 companies, it will be close to US$3 trillion Most of that value comes from business innovation and optimisation, not IT cost savings 1.3T in Asia, 1.1T in North America, Europe & Africa: 800B https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/projecting-the-global-value-of-cloud-3-trillion-is-up-for-grabs-for-companies-that-go-beyond-adoption 17

Cloud Essentials (McKinsey 2021) Strategy & Management Define, shape and manage the overall cloud strategy. Focus on an effective cloud-services architecture, a responsive operating model, and a pragmatic security and risk-management approach. Business-domain adoption Move and transform functionality and services from each business unit onto cloud platforms, creating business value at acceptable risk. 18

Cloud Providers 1 Masters Amazon, Google, Microsoft, Aliyun Huge data centres and services for mostly smaller businesses Enterprise Software Specialists Oracle, SAP Traditional providers to large firms Trying to bridge to the SME market, with SaaS and PaaS services. MySAP. 19

Cloud Providers 2 Independent Software Vendors Adobe Going beyond simple software sales to software hosting for clients Integrated Giants IBM, HP Cost-effective, large scale, scalable, private, secure solutions across IaaS, PaaS and SaaS domains. 20

The Flight to the Cloud IDC (2023) reports that the demand for IaaS is still rising as more and more organisations move applications to the cloud USD19.4 billion in 2023, growing 28% annually to 2026 The top 5 vendors of IaaS services (86%) are: Amazon Web Services, Microsoft, Google, Alibaba, and Tencent (Amazon is more than 50%) 21

Cloud Consequences The cloud is changing the traditional technology ecosystem. Some internal departments will disappear CityU outsources email services to the cloud (Microsoft), so the people who used to support email are no longer here Cloud providers create value for a wide range of customers not just the rich and large or the Fortune 500 but SMEs and individuals too? The cloud is inherently disruptive there will be winners and losers 22

Cloud Issues Some data is just too sensitive to store in the cloud E.g.: Key client data Would HSBC want to store details of its VIP customers in the same cloud as BOC or Bank of America? How quickly can you access data if it is in the cloud ? You need to have a good Service Level Agreement (SLA) Sometimes I feel that CityU email is too slow to respond a cloud issue? 23

E-Commerce E-Commerce is a more simple form of digital enablement, whether on websites or mobile devices www.buyoyo.com www.solerebels.com www.avaaz.org www.plusgrade.com 24

Social Commerce S-Commerce is a more recent, and still evolving, trend Pinduoduo - www.pinduoduo.com Kaboodle www.kaboodle.com Little Red Book www.xiaohongshu.com GroupOn www.groupon.com Mogujie www.mogujie.com 25

Livestreaming Commerce In Western countries, livestreaming is most commonly associated with online games, like Twitch. In China, livestreaming is synonymous with online shopping and valued at close to RMB1 trillion Livestreams take place in real time and often involve influencers or key opinion leaders demonstrating a product and responding to questions from a digital audience. 26 https://ebusinessinstitute.com/livestreaming-the-latest-trend-in-ecommerce/

Chips Under the Skin How far do we want to go? Perhaps it is a niche area, but not only are pets and prisoners chipped but also party-goers Some clubs offer microchips to members to help pay for goods/services: see: https://en.wikipedia.org/wiki/Microchip_implant_(human) https://www.youtube.com/watch?v=CyzfVosXdu8 In Sweden, it seems that everyone will get chipped! https://www.youtube.com/watch?v=Ksw-arKvMPk 27

Recommendation Agents Many large e-commerce platforms now use RAs to drive consumers impulsive behaviour Amazon: Cross-selling mechanisms These are effective because, well, we are easily tempted into buying things that we don t need 28

Digital Enablement Digital Enablement (DE) is an emerging but unstable phenomenon of our times Digital technologies transform, empower and popularize the business, social & consumer activities in which we engage DE creates opportunities for individuals & organizations It also helps developing countries to leapfrog over intervening technology developments But DE is not a magic bullet Human creativity, innovation and intervention are required Some people will be disadvantaged by DE DE requires a) infrastructure, b) education, c) strategy 29

DE Requirements Technology Access + Infrastructure We take it for granted, invisible and omnipresent Governance Essential for security, financial regulation, IP protection Trust Assumed, yet if people don t trust it, they won t want it Security Critical, yet data is regularly hacked from organisations Education We need to know why we need it. Digital literacy. In Africa, the top reason for people not using the Internet is not knowing how to use it or why they should use it. 30

The Digital Divide The old digital divide was concerned with who had access to the Internet That s still here, but with some refinements The ITU estimates that one billion people do not have telephone access, with an extra 3 billion not connected to broadband Internet The digital divide has narrowed (more people are visible and online) but also deepened (each new generation of technology leaves some people further behind, ever more invisible) 31

Four Barriers to DE Availability The access problem; networks and devices; power supply; high speed; infrastructure Applications that meet local needs in local languages with local content Affordability Of the hardware and network But also relative to the value that is obtained Appetite Why do I need it? How will it benefit me? Fear. Ability Digital literacy. How can I do it? Education. http://www.huawei.com/minisite/digital-enablement/download/Digital+Enablement_ENGLISH+online.pdf 32

Success Stories in Developing Countries Mobile social media (for work and play) is common, though most of the apps are global, not local Mobile payments are popular Taobao Villages in China But outside urban areas, connectivity is an issue The range of local applications is more limited 33

DE for Individuals - 1 Mobile Money Systems e/m-Wallets linked to bank/cc accts PayPal, Apple Pay, AliPay, WeChat Pay During Covid19, the % of transactions via e-wallets soared, with credit cards declining Smart Cards un/linked to bank accts Octopus, Oyster, Myki, Opal, EZ-Link, Touch n Go, 34

DE for Individuals - 2 Phones SIM cards (mobile purchases, savings and transfers) WeChat, M-Pesa, M-Birr, M-Paisa, bKash, mKash, Smart, Mukuru, etc. 35

DE for Individuals 3: BoP The Bottom of the Pyramid (BoP) refers to the ~3 billion people who live on less than HK$20 a day and the 200 million small businesses who don t have access to the banking system Although poor, there are so many people here that they may represent a huge economic opportunity, especially as entrepreneurs Mobile money systems provide an opportunity for these unbanked people to become banked 36

DE for Individuals: SE Asia: Digital Life Hack In SE Asia, 6 in 10 people are unbanked. ~17% of transactions are cashless ~600 million younger consumers who have phones but no access to financial infrastructure Those numbers create a huge potential for mobile wallets that support many different functions Payments, purchases, credit/loans, And not just in urban areas, but country wide 37

DE for Employees - 4 The Better than Cash Alliance (www.betterthancash.org) tracks DE events GAP pays all (1M+) garment workers in Tier 1 suppliers (800 factories in 30 countries) digitally GAP wants to draw unbanked workers (80% female) into the financial system to give them better control over saving, transferring and investing 38

DE for Individuals - 5: M-Pesa M-Pesa led the wave with a number of mobile money market initiatives, HQed in Kenya, currently operating in 7 countries: KE, TZ, MZ, CD, LS, GH, EG Established in 2007, by 2014, 50% of Kenya s GDP flowed through it. Max USD3900 can be held in m-pesa accts Thousands of businesses depend on M-Pesa But, Kenya has no data privacy law and M-Pesa data has been exploited for criminal purposes 39

DE in China - 6 Clearly the China market continues to break records with the number of people who use various apps for various purposes and who no longer use cash for anything China is world-leading in mobile apps, in terms of variety and transaction volumes But why is China so advanced? And why are other countries so backward? Or is it not that simple? 40

DE for Individuals 7: WeChat WeChat is trying to become a global super app In South Africa, Standard Bank directly backed WeChat s Wallet with support for the most popular apps: P2P transfers, hotel and restaurant bills, taxis It operated from 2015-2020, then closed down WeChat has now exited Africa completely. See also Jambo. 41

DE for Individuals 8: mHealth This is one of the most popular domains for DE There are hundreds of mHealth pilots, though few scale up mClinica is a rare scaled-up success story Digital networks of pharmacies, physicians, and patients in six ASEAN countries. 42

Culture Patterned ways of thinking, feeling and reacting Behaviour styles Negotiating techniques Protocol Business practices Cultural misunderstandings can threaten or even destroy your efforts in a foreign country Where and who is foreign these days? Define foreign . Are some of us more foreign than others?! Am I a foreigner?! Are you?! Does it depend ? 43

Understanding Culture is not just about observing. The same behaviour can have different meanings and different behaviours can have the same meaning [Schneider & Barsoux, 1997] Why do people behave in this way? What are their underlying values and beliefs? Do we really live in a global village? We do not see things as they are we see them as we are [Anais Nin] 44

The Problem of Relativism Describe the typical American Brazilians say: always in a hurry serious, reserved cautious restrained composed methodical na ve Japanese say: relaxed friendly spontaneous reckless uninhibited emotional impulsive

What is Culture? HUMAN NATURE universal to laughto cry CULTURE group level construct When is it appropriate to laugh? to cry? Where is it appropriate to laugh? to cry? way of life passed down from one generation to the next through education and experience Concise Columbia Encyclopedia collective programming of the mind Geert Hofstede PERSONALITY individual each of us laughs / cries at different times / places 46

Iceberg Model of Culture Behaviour Attitudes Assumptions Values Beliefs 47

Culture (Behaviour) Above the Surface Greetings How should you greet someone? kiss, hug, bow, shake hands or knock skulls (?!) Does it depend on who they are, who you are? Dress What is appropriate attire at work? at a funeral? Punctuality What does it mean to be on time ? Now? How quickly should you reply to an e-mail? Gift giving Should you give gifts to business associates? What should you give? How much? Corporate Logos What projects the right or wrong image? 48

Culture Below the Surface Attitudes I can t live without an iPhone Assumptions An MBA is essential for managers Values I value open information access. Privacy is redundant Beliefs I believe that AI is the future 49

Colours in Different Cultures Red Blue Green Yellow White Purple Colour Culture Anglo Danger Strong Reliable Success Jealousy Happy Warm Purity Royalty Brazilian Passion Religion Death Death Peace Mourning Chinese Happy Success Heaven Disgrace Wealthy Powerful Death Purity Spirit Healing Japanese Anger Danger Villain Young Energetic Grace Nobility Death Emperor Wealth Arab Death Evil Virtue Safety Spirit Peace Wealth Happy Joy Wealth Indian Life Religion Hope Success Death Sorrow 50