IT devices such as Samsung mobile phones and Apple iPhones, along with IBM wireless Internet access and PC-style office applications, save businesses time and travel expenses by enabling employees, customers, and suppliers to communicate from any location. IT’s mobile messaging capabilities mean that geographic separation between the workplace and headquarters is no longer a barrier to getting things done. Employees no longer work only at the office or the factory, nor are all of a company’s operations performed at one place—people take their offices with them. When using such devices, off-site employees have continuous access to information, instead of being forced to be at a desk to access their work and work-related data and information. Client project folders, e-mail, and voice messaging are accessible from virtually any location.

With access to the Internet, company activities may be geographically scattered but still remain coordinated through a networked system that provides better service for customers. Many businesses, for example, coordinate activities from one centralized location, but their deliveries flow from several remote locations, often at lower cost. When you order furniture—for example, a chair, a sofa, a table, and two lamps—from an online storefront, the chair may come from a warehouse in Philadelphia and the lamps from a manufacturer in California; the sofa and table may be shipped direct from different suppliers in North Carolina. Beginning with the customer’s order, activities are coordinated through the company’s network, as if the whole order were being processed at one place. This avoids the expensive in-between step of first shipping all the items to a central location.

Networks and technology are also leading to leaner companies with fewer employees and simpler structures. Because networks enable firms to maintain information linkages among both employees and customers, more work and customer satisfaction can be accomplished with fewer people. Bank customers connect into a 24-hour information system and monitor their accounts without employee assistance. Instructions that once were given to assembly workers by supervisors are now delivered to workstations electronically. IT communications provide better use of employee skills and greater efficiencies from physical resources. For example, truck drivers used to return to a shipping terminal to receive instructions from supervisors on reloading freight for the next delivery. Today, one dispatcher using IT has replaced several supervisors. Instructions to the fleet arrive on electronic screens in trucks on the road so drivers know in advance the next delivery schedule, and satellite navigation services, such as the SiriusXM NavTraffic, alert drivers of traffic incidents ahead so they can reroute to avoid delivery delays.³

Collaboration among internal units and with outside firms is greater when firms use collaboration (collaborative) software and other IT communications devices, which we’ll discuss later in this chapter. Companies are learning that complex problems can be better solved through IT-supported collaboration, either with formal teams or spontaneous interaction among people and departments. The design of new products, for example, was once an engineering responsibility; now it is a shared activity using information from customers, along with people in marketing, finance, production, engineering, and purchasing, who collectively determine the best design. For example, the design of Boeing’s 787 Dreamliner aircraft is the result of collaboration not just among engineers but also with passengers (who wanted electric outlets to recharge personal digital devices), cabin crews (who wanted more bathrooms and wider aisles), and air-traffic controllers (who wanted larger, safer air brakes). Although the 787 suffered from some initial design flaws, solutions involved a worldwide network of technical collaboration among Boeing engineers, suppliers, customers, and NASA, and now the 787 has become a major business success for Boeing.⁴

The global reach of IT enables business collaboration on a scale that was once unheard of. Consider Lockheed Martin’s contract for designing and supplying thousands of Joint Strike Fighters in different versions for the United States, Britain, Italy, Denmark, Canada, and Norway. Lockheed can’t do the job alone—over the project’s 20-year life, more than 1,500 firms will supply everything from radar systems to engines to bolts. In just the start-up phase, Lockheed collaborated with Britain’s BAE Systems along with more than 70 U.S. and 18 international subcontractors at some 190 locations, including an Australian manufacturer of aviation communications and a Turkish electronics supplier. In all, 40,000 remote computers are collaborating on the project using Lockheed’s online system. Digital collaboration on a massive scale is essential for coordinating design, testing, and construction at this level while avoiding delays, holding down costs, and maintaining quality.⁵

IT has also changed the nature of the management process. The activities and methods of today’s manager differ significantly from those that were common just a few years ago. At one time, for instance, upper-level managers didn’t concern themselves with all of the detailed information filtering upward from the workplace because it was expensive to gather, the collection and recording process was cumbersome, and information quickly became out of date. Most day-to-day management was delegated to middle and first-line managers.

With digital processing of databases, specialized software, and interactive networks, however, instantaneous information is accessible and useful to all levels of management. For example, consider enterprise resource planning (ERP), which is an information system for organizing and managing a firm’s activities across product lines, departments, and geographic locations. The ERP stores real-time information on work status and upcoming transactions and notifies employees when action is required if certain schedules are to be met. It coordinates internal operations with activities of outside suppliers and notifies customers of upcoming deliveries and billings. Consequently, more managers routinely use it for planning and controlling companywide operations. Today, a manager at Hershey Foods, for example, uses ERP to check on the current status of any customer order for Kisses or strawberry Twizzlers, inspect productivity statistics for each workstation, and analyze the delivery performance on any shipment. Managers can better coordinate companywide performance. They can identify departments that are working well together and those that are lagging behind schedule and creating bottlenecks.

IT advances also create new manufacturing and service capabilities that enable businesses to offer customers greater variety, customizable options, and faster delivery cycles. Whether it’s an iPhone app or a Rawlings baseball glove, today’s design-it-yourself world is possible through fast, flexible manufacturing using IT networks. At Ponoko.com, you can design and make just about anything, from electronics to furniture. Buyers and materials suppliers, meeting virtually, have rapidly generated thousands of product designs online. The designs can be altered to suit each buyer’s tastes. Similarly, at San Francisco–based Timbuk2’s website, you can “build your own” custom messenger bag at different price levels with your choice of size, fabric, color combination, accessories, liner material, strap, and even left- or right-hand access.⁶ This principle of mass customization allows companies to produce in large volumes, and IT allows each item to feature the unique options the customer prefers. With IT, the old standardized assembly line has become quickly adaptable because workers have instantaneous access to assembly instructions for all the product options, and equipment can be changed quickly for each customer’s order.

As shown in Figure 14.1, flexible production and speedy delivery depend on an integrated network of information to coordinate all the activities among customers, manufacturers, suppliers, and shippers.

Figure 14.1

Networking for Mass Customization of a Physical Product

Service industries, too, including health care, banking, and recreation, are emphasizing greater flexibility for meeting customers’ needs. Personalized pet care at HappyPetCare.net, for example, relies on IT for scheduling customized activities—dog walking, pet boarding, pet sitting, house-sitting, pet taxis, and other services. In tourism, at OceaniaCruises.com, passengers have flexibility for selecting personalized onboard services for meals, recreation and entertainment activities, educational classes, and spa treatments. Passengers can also customize their air travel schedules along with personalized pre- and post-cruise land programs.

Not only is IT improving existing businesses, it also is creating entirely new businesses where none existed before. For big businesses, this means developing new products, offering new services, and reaching new clients. Only a few years ago, today’s multibillion-dollar behemoth known as Google was a fledgling search engine. That company now boasts not just a search engine but hundreds of services, including virtual maps, YouTube video, Twitter accounts, Facebook pages, instant messaging, Gmail (Google’s e-mail service), and online voicemail and software services such as photo editing, cloud storage, and document creation.

IT-based industries, including computer backup and identity-theft protection, offer valuable services for individuals and business customers. Online backup protects against data loss resulting from hard-drive crashes, fire, flood, and other causes. Carbonite.com and Backblaze.com, for example, provide automatic continuous backup so clients can recover lost data quickly. For guarding against identity theft, firms such as LifeLock.com and IdentityGuard.com protect personal information by alerting clients to various information-theft risks and sending advice on steps for avoiding identity theft.

The IT landscape has also presented home-based businesses with new e-business opportunities. Consider Richard Smith. His love for stamp collecting began at age seven. Now, some 50 years after saving that first stamp, he’s turned his hobby into a profitable eBay business. Each day begins at the PC in his home office, scanning eBay’s listings for items available and items wanted by sellers and buyers around the world. With more than 6,000 sales transactions to date, Richard maintains a perfect customer rating and has earned more than $4,000 on each of several eBay transactions. Today, thousands of online marketplaces allow entrepreneurs to sell directly to consumers, bypassing conventional retail outlets, and enable business-to-business (B2B) selling and trading with access to a worldwide customer base. To assist start-up businesses, eBay’s services network is a ready-made online business model, not just an auction market. Services range from credit financing to protection from fraud and misrepresentation, information security, international currency exchanges, and postsales management. These features enable users to complete sales transactions, deliver merchandise, and get new merchandise for future resale, all from the comfort of their own homes. Many eBay users, like Richard Smith, have carved profitable new careers for themselves with the help of these systems.

Can advancements in IT really make the world a better place? Developments in smartphones, social networking, home entertainment, automobile safety, and other applications have certainly brought enjoyment and convenience to the everyday lives of millions of people around the globe. Extending technology beyond previous model cell phones and PCs, new technologies provide access to endless choices of apps (shorthand for application software), allowing each user to “build it your way,” depending on what you want your device to do and how and where you’ll be using it. Apps for computers and smartphones include programs for learning languages, music, work, games, traveling, art, and almost any other area of interest. Just two years after its opening, Apple’s App Store had supplied more than 40 billion app downloads worldwide to users of Macs, iPhones, iPads, and iPod touches. And that number has continued to grow steadily in the years since.

Social networking, a valuable service for individuals and organizations, is made possible by IT. The many forms of social media—blogs, chats, and networks such as LinkedIn, Twitter, and Facebook—are no longer just playthings for gossips and hobbyists. They’re also active tools for getting a job. When the economic meltdown hit in 2009, millions of job seekers turned to online networking—tapping leads from friends, colleagues, and acquaintances—for contacts with companies that might have been hiring. Peers and recruiters are networking using electronic discussion forums and bulletin boards at websites of professional associations and trade groups, technical schools, and alumni organizations. Some social sites provide occupation-specific career coaching and job tips. Scientists connect with Epernicus, top managers use Meet the Boss, and graduate students are connecting with Graduate Junction.⁷

Organizations, too, including hospitals and medical equipment companies, have embraced IT advancements to provide better services. For example, when treating combat injuries, surgeons at Walter Reed National Military Medical Center in Bethesda, Maryland, rely on high-tech imaging systems that convert two-dimensional photographs of their patients’ anatomies into three-dimensional (3D) physical models for presurgical planning. These 3D mockups of shoulders, femurs, and facial bones give doctors the opportunity to see and feel the anatomy as it will be seen in the operating room, before they even use their scalpels. Meanwhile, pill-sized cameras that patients swallow are providing doctors with images of the insides of the human body, helping them make better diagnoses for such ailments as ulcers and cancer.⁸