BIT 300Study Guide F10

BIT 300Study Guide - BIT 300 Fall 2010 STUDY GUIDE(First 7 sessions Concept Area 1 Information Economics(JCQ a What are information goods What are

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BIT 300 Fall 2010 STUDY GUIDE (First 7 sessions) Concept Area 1. Information Economics (JCQ) a. What are information goods? What are their important characteristics? Anything that can be digitized (i.e. encoded as a string of bits). Not physical, anything informational. Statistics, news, music, movies, bits and bytes, etc. 1. Cost to produce, cheap to reproduce. 2. Easy to copy, hard to protect. 3. Value = experience (often). 4. Compete for attention. b. What is Moore’s Law? What are its impacts on IT? How does it drive change in the economy as a whole? Moore’s law says that technology (memory, CPU processing power, etc) will basically double in potency every two years, becoming infinitely powerful in the future. What this means is that costs decrease exponentially as time goes on since you can fit more and more circuits in the same amount of space. This will make IT cheaper and cheaper until basically everyone can afford it, allowing the overall economy to increase and grow by taking advantage of the productivity gains. 2. IT and Business Activity a. How much do businesses invest in IT? What are the benefits and risks? There was roughly $2700 US corporate IT investment per employee at the end of 2004. IT benefits are hard to measure, macroeconomic measurements unclear, not showing up in productivity statistics. 30 – 75% of investments fail. However, many benefits as well: Boeing 777 was only a 52 month de4velopment process done with CAD and virtual prototypes compared to the 727 at 81 months and paper and physical prototypes. b. How does IT affect : i. business activity? See above basically. Enables new business processes (supply chain management, real time shipping tracking, product design simulation, real time process control, etc.) About half of all capital investment is in IT.
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ii. Jobs and skills? Changing them dramatically, shifting from less menial tasks to more creative ones. Routine shit like pushing buttons factory stuff etc is automated. iii. Product and process innovation? It is present in 79% of innovative companies, 74% of IT departments lead business process improvement, same percentage involved in new product/service development. Enables new products/services, iPods, cell phones, Facebook, nice electronic shit in cars, etc. Enables businesses like E-Bay. iv. Competitiveness? IT can determine competitiveness; for example, it is the main reason why Wal-Mart is crushing everyone else like K-Mart. Wal-Mart’s superior pull inventory system is enabled by IT, while K-Mart went bankrupt cause they had too much inventory. v. Globalization? Enables globalization. Pretty obvious how, no explanation necessary. Hint: see below. 3. The World Is Flat (Conniechung) a. What are Friedman’s 10 flatteners? 1.) 11/9/89: Fall of Berlin Wall and 5/22/90: Windows Launched
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This note was uploaded on 02/13/2011 for the course BIT 300 taught by Professor N/a during the Fall '10 term at University of Michigan.

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BIT 300Study Guide - BIT 300 Fall 2010 STUDY GUIDE(First 7 sessions Concept Area 1 Information Economics(JCQ a What are information goods What are

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