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Critical Information: MIS Monitors the Ever-Changing World of IT
The following article is the ninth in a series on the activities and research taking place in each academic unit at HBS.
The information technology (IT) industry, for which rapid change has been a constant for decades, has reached another important phase in its evolution. "Information technology is no longer being used as just a tactical resource, it's now fundamentally influencing business strategy and competition," says Richard L. Nolan, MBA Class of 1942 Professor of Business Administration, who teaches in the School's Management Information Systems (MIS) Interest Group, a subset of the General Manage-ment unit.
With the growing importance of the Internet and the fact that the daily operations of most organizations now rely heavily on computer technology, IT "has moved to the top of the agenda of most CEOs," notes Nolan. "We've never seen anything like it."
The five members of the MIS faculty, as well as faculty from other units whose research is related to MIS, are currently engaged in research to track the evolution of information technology and to determine how IT infrastructure can create value in the marketplace. Nolan, who developed the influential "Stages Theory" framework for IT baselining and planning, is examining how the new information economy is transforming the traditional management principles of the industrial economy.
Nolan is studying, for example, how IT is changing the traditional "make-and-sell" business model, in which companies manufacture products based on their best efforts to forecast customer needs. With new technologies such as online grocery scanners, companies can better monitor consumer behavior, allowing them to anticipate needs more accurately and even create new products geared to narrow market segments. Nolan calls the new managerial model emerging out of these capabilities the "sense-and-respond" approach. He and HBS professor Stephen P. Bradley explore the implications of this paradigm shift in their upcoming book, Sense and Respond: Capturing the Value of Network Era Tech-nologies, which draws on the 1995 HBS colloquium "Multimedia and the Boundaryless Organization."
With the creation of services such as online newspapers and television home shopping, information has become a commodity itself, replacing physical products and services. Associate Professor John J. Sviokla, along with Assistant Professor Jeffrey F. Rayport of the Service Manage-ment unit, has been investigating the strategic challenges of managing information as part of a larger exploration of what they call the "marketspace" of electronic commerce.
Sviokla and Rayport have formulated a conceptual framework for intangible, information-based products - a construct they call "the virtual value chain" - which is analogous to the physical value chain. They discuss this concept in their forthcoming book Managing in the Marketspace.
MIS professor Lynda M. Applegate is also studying the evolution of electronic commerce, as well as examining how information technology can lead to more flexible organizational structures and innovative management control systems. These ideas appear in her recent casebook Managing in an Information Age.
Professor F. Warren McFarlan is currently engaged in an analysis of the benefits and risks of outsourcing information services. He is also exploring how firms use information technology to achieve competitive advantage through further refinement of his "strategic grid" framework.
MIS faculty have made technology an integral part of the learning process in the group's three MBA electives - Managing in the Information Age; Competition, Transformation, and Reengineering; and Business and the Internet - in which students incorporate into their coursework aspects of the technology they are studying. In the popular course Managing in the Information Age, for example, students design an information company and build a Web page that describes the company to potential investors.
Of these electives, the new interdisciplinary course Business and the Internet: Strategy, Law, and Policy is a joint offering of HBS, Harvard Law School, and the Kennedy School of Government. In the seminar, whose faculty members include Professor Nolan, students examine issues of law, public policy, and business strategy that are arising in conjunction with Internet commerce.
MIS is also a topic of great interest in the Executive Education curriculum. An Executive Education workshop taught by MIS faculty, The Exploding Internet: New Game, New Rules, to be held May 4Ð8, 1997, will help executives gain a better understanding of how the information superhighway is affecting and enhancing business. Delivering Information Services, for chief information officers and managers leading IT activities in their organizations, will be held July 13Ð25, 1997.
"It's an incredibly exciting time for the MIS Interest Group," says Nolan. "New technologies create new opportunities to capture economic value, and information technologies are the most robust technologies since the advent of the steam engine - some even say since the printing press."
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