College Notes, IBIS Exam Revision Lecture 1 to 11 PDF

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IBIS Exam Revision Learning tasks 1,3,4,5

Lecture 1- Unit Overview basic business

Business component Information systems (IS) - Is a group of components that interact to produce information. These consist of the 5 components of hardware, software, data, procedures and people. A set of interrelated elements or components that collect (input), manipulate (process), store and disseminate (output) data and information, and provide a feedback mechanism to meet an objective.

Management information systems (MIS) - is the development and use of information systems that help the business achieve their goals and objectives. It's the function that plans for, develops, implements, and maintains IT hardware, software, and applications that people use to support the goals of an organization. Is the solution to get departments working interdependently. Seamless transfer of data from one department to another Data from all departments can been seen, gathered, used. Improved intelligence & knowledge & business decisions. Way of monitoring the entire system by viewing multiple inputs being processed or transformed to produce outputs, while continuously gathering feedback on each part Information technology - refers to raw technology and concerns only the software and data components of an information system. Its a computer-based tool that people use to work with information, support information and the information-processing needs of an organization. Business models - encompass the activities performed by a company to create, deliver and generate revenue or other benefits Types of business Sole proprietorship - a type of business entity that is owned and run by one individual or one legal person and in which there is no legal distinction between the owner and the business. Partnership - an association of two or more people as partners. Corporation - a large company or group of companies authorized to act as a single entity and recognized as such in law. Technology component •

Introduction into network and internet fundamentals as well as systems design and development using the Systems Development Life Cycle (SDLC) and Process Modelling using Swim Lane or DFDs which illustrate a system.

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Database fundamentals for the management of company data.

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Security issues pertaining to networks and databases to ensure privacy of information.

The overlap between Business and Technology include the differentiation between data, information, knowledge management, and data management. This includes the dissemination of information

while exploring ethical issues pertaining to privacy and culture as well as security requirements and planning to protect business information in a global environment. BIS component (integrates everything) eBusiness - The conducting of business on the Internet including buying & selling, serving customers and collaborating with business partners. Types of eBusiness include: B2B, B2C, C2B, C2C. eCommerce - The buying and selling of goods and services over the Internet mCommerce - The ability to purchase products and services through a wireless Internet-enabled device. 3 Strategic initiatives

1. Supply chain management (SCM) - is the management of the flow of goods. It includes the movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption.

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Customer relationship management (CRM) - involves managing all aspects of a customer’s relationship with an organisation to endeavour to increase customer loyalty and retention and an organisation’s profitability.

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Enterprise resource management (ERM) - Integrates all departments and functions throughout an organisation or enterprise into a single IT system (or integrated set of IT systems) to enable decisions to be made by viewing enterprise-wide information on all business operations. -A process by which a company (often a manufacturer) manages and integrates the important parts of its business

Operations management - also called production management includes the methods, tasks, and techniques organizations use to produce goods and services. Marketing - is the process associated with promoting the sale of goods or services Market share - Calculated by dividing the firm’s sales by the total market sales for the entire industry. Reasons to Increase Market Share: • • • •

Economies of scale Sales growth in a stagnant industry Reputation Increased bargaining power

Lecture 2- Competing in the information age

- People, information, and information technology (in that order of priority) are inextricably linked If one fails, they all fail. Information is one of the most important assets in an organization, and the primary way that people get information is through information technology

Data - raw facts that describe the characteristic of an event e.g. student name, address, unit, tutorial Information - data converted into a meaningful and useful context e.g. number of students in each tutorial

Knowledge - Skills, experience and expertise coupled with information and intelligence. System - A set of elements or components that interact to accomplish goals. Systems can be simple or complex, stable or dynamic, adaptive or non-adaptive, permanent or temporary. Systems are modelled. Organization - A deliberate arrangement of people to accomplish some specific purpose. They provide customers with a good or service and most intend to make a profit. Organizations are complex because: • People are hard to predict & understand • Interactions between diverse people • Made up of people, departments, technology, goals, environments • Complexity makes it hard to know & understand what is really going on

IT impact of department organisations Accounting - Provides quantitative info about the finances of the business eg. records, measures, describes and reports financial info. Finance - deals with the strategic financial issues associated with increasing the value of the business, while observing applicable laws and social responsibilities. Human resources - Includes the policies, plans, and procedures for the effective management of employees e.g. Employee recruitment, selection, training and development, appraisals, evaluation, rewards and communication. Sales - Performs the function of selling goods or services. Each functional area undertakes a specific core business function Sales and Marketing – forecasting, advertising, promotions Operations and Logistics – purchasing, supplying, receiving Accounting and finance – accounting, planning, budgeting, tax, costs Human resources – hiring, training, benefits, and payroll

Problems occur if departments work independently:

• • •

Value creation depends on how well work is integrated across each function Potential for inefficiencies of work transfer, coordination, information transfer & process control Lack of communication, information flow and data sharing

Business strategy - a leadership plan that achieves a specific set of goals or objectives, such as: developing a new product or service. E.g. entering a new market, increasing customer loyalty, attracting new customers, increasing sales. Competitive intelligence - the process of gathering information about the competitive environment to improve the company's ability to succeed. Competitive intelligence tools • Five Forces Model – for evaluating industry attractiveness • Three strategic initiatives– for choosing a business focus (will not be covered in this unit) • Value chain analysis – for executing business strategies

Porter's 5 forces to help determine the attractiveness of an industry 1. Bargaining power of customers

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How much pressure customers can place on a business. If one customer has a large enough impact to affect a company's margins and volumes, then the customer hold substantial power. E.g. there are no substitutes High when buyers have many choices of whom to buy from and low when their choices are few Switching costs that make customers reluctant to switch to another product are a way to manipulate the buyer power back into your (organization's) favour.

2. Bargaining power of suppliers    

Suppliers’ ability to influence the prices they charge for supplies Supply chain consists of all parties involved, directly or indirectly, in the procurement of a product or raw material Organisations are likely to both suppliers (to customers) and customers (of other supplier organisations) Loyalty program rewards customers based on the amount of business they do with a particular organisation is another

3. Threat of new entrants  

High when it is easy for new competitors to enter a market, and low when there are significant entry barriers Entry barrier a feature of a product or service that customers have come to expect and that entering competitors must also offer for survival

4. Threat of substitutions 

High when there are many alternatives to a product or service, and low when there are few alternatives

5. Rivalry among existing competitors  high when competition is fierce in a market, and low when competitors are more complacent  Product differentiation occurs when a company develops unique differences in its products or services with the intent to influence demand

Value chain analysis - Views a company as a series of business processes that each add value to the product or service. - is a business tool to identify processes in how a company can “add value for the customer, and create a competitive advantage for itself, with a cost advantage or product differentiation. - It's tool for determining how to create the greatest possible value for customers. The goal is to identify processes in which the company can add value for the customer and create a competitive advantage for itself, with a cost advantage or product differentiation. The value chain groups a company’s activities into two categories: Primary value activities - acquire raw materials, manufacture, deliver, market, sell and provide aftersales services. • Inbound logistics acquires raw materials and resources, and distributes • Operations transforms raw materials or inputs into goods and services • Outbound logistics distributes goods and services to customers • Marketing and sales promotes, prices and sells products to customers • Service provides customer support Support value activities - include company infrastructure, HRM, technology development and procurement. These support the primary activities. • Firm infrastructure includes the company format or departmental structures, environment and systems • Human resource management provides employee training, hiring and compensation • Technology development applies MIS to processes to add value • Procurement purchases inputs such as raw materials, resources, equipment and supplies

Lecture 3- Processes & Decisions

Business Process - A standardized set of activities that accomplish a specific task, such as processing a customer’s order. Functional processes  Activities in a single department or function  Problem : may lead to ‘islands of automation’ Cross-Functional processes  Activities among many business departments  Eliminate or reduce isolated systems and data  Example: processes involved in Product return/exchange/or recall, Sales, Finance, Marketing, Inventory, Operations, Logistics. Inter-Organisational processes  Activities that cross organisational boundaries.  Business processes that involve activities in another business or organization, Usually as a part of Supply Chain Management (SCM), e.g. credit card transaction processing.  More difficult than functional and cross-functional systems, Requires negotiation, Contracts, Litigation to resolve conflicts between organizations. Business process modeling (or mapping) - the activity of creating a detailed flowchart or process map of a work process, showing its inputs, tasks and activities in a structured sequence. Business process model - a graphic description of a process, showing the sequence of process tasks. E.g. swinlane

Strategies - are an integrated set of actions taken so that goals can be achieved. IS play a pivotal role in supporting and enabling an organization as it implements strategies and attempts to achieve organisational goals. IS enables businesses to gain competitive advantage in today's digital economy. e.g. GPS.

Metrics - Measurements that evaluate results to determine whether a project is meeting its goals. 

Critical success factors (CSF) - Crucial steps that companies perform to achieve their goals and objectives and implement their strategies.  Create high-quality products  Retain competitive advantages  Reduce product costs  Increase customer satisfaction  Recruit and retain the best professionals

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Key performance indicators (KPI) - The quantifiable metrics a company uses to evaluate progress towards achieving its critical success factors.  Turnover rates of employees  Number of product returns  Number of new customers  Average customer spending - External KPI e.g. Market share, the portion of the market the firm captures

- Internal KPI e.g. ROI indicates the earning power of a project - KPI's help measure the progress of CSF, one CSF can have multiple KPI's

Efficiency IT metrics - measures the performance of the IT system itself. E.g. throughput, transaction speed, system availability, information accuracy, response time. Effectiveness metrics - measures the impact IT has on business processes and activities. E.g. Usability, customer satisfaction, conversion rates, financial. 3 Layers of decision making 

Operational - Routine / Often repeated daily e.g. front line sales. Employees develop, control and maintain core business activities required to run day to day operations. Use data & Information. Have structured decisions. KPI's focus on efficiency e.g. employee sickies, inventory

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Managerial - Decision has larger / longer impact where managers must use info and knowledge to make decisions. e.g. monthly sales = change? Short and medium term decisions., not all answers can be calculated, KPI's focus on efficiency and CSF's focusing on effectiveness e.g. what will be our sales forecast or who are our best customer's by region etc.

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Strategic - Decision has long term impact e.g. open/close stores. Managers develop long term strategies, goals and objectives. Unstructured decisions, no rules or procedures guide decision making. CSF's focusing on effectiveness e.g. industry trends worth analysing, what new product does the company need?

Difficulties in decision making   

People need to analyse large amounts of information. Computer systems have increased the amount of data and information available People must make decisions quickly. Opportunities will be missed if the decision making process takes too long. Procrastination & analysis paralysis. People require sophisticated analysis techniques such as modelling and forecasting to make good decisions. Information systems can reduce the time required to perform these sophisticated techniques. They can also speed up errors. ‘Fat Finger’

Decision support systems - Models information to support managers and business professionals during the decision-making process. 4 quantitative models used by DSS's 1. What if analysis - Impact of change in a variable. E.g. what happens to the supply chain of bananas if a cyclone hits. 2. Sensitivity analysis - Repeatedly changing the number of items sold to see if impact profit margins 3. Goal seeking analysis - How many customers must purchase a product to increase gross profits to $5 million

4. Optimism analysis - Managers can calculate the highest profit margin by changing revenue and cost limits.

Lecture 4 Connectivity

-Networks enable telecommunications, or the exchange of information (voice, text, data, audio, video). Impact of the internet       

Easy to compile e.g. search and comparing info on products, prices, customers etc. Increased richness, the depth and breadth of info transfered between customers and business. Business and customers can now collect and track detailed info using the internet. Increased reach, business can share info with customers all over the world Improved content, provide dynamic and relevant content to help make decisions Interactivity Social cues, full range of verbal, paralinguistic and kinetic cues etc. Language variety

Networks - used to connect computers and computer equipment in a building, around the country, or around the world to enable electronic communications. E.g. Intranet, internet, extranet. Intranet - A restricted network that relies on internet technologies to provide an internet-like environment within an organization for information sharing, communications, collaboration, web publishing and the support of business processes. When part of an intranet is made accessible to customers and others outside the business, that becomes part of an extranet. An internal network based on Web technologies that allows people within organization to exchange information and work on projects. Extranet - An extension of an intranet that is only available to authorized outsiders, such as customers, partners, suppliers and vendors. A network based on Web technologies that allows selected outsiders, such as business partners and customers, to access authorized resources of the intranet of a company. Businesses can send private messages through the public network, using special encryption/decryption and other security safeguards to connect one part of their intranet to another. Virtual Private Network (VPN) - Companies extend a private network across a public network, such as the Internet in order to create private, secure internet access. In effect a ‘private tunnel’ within the internet. Often the term is used interchangeably with “remote access”.

Digital Divide - A worldwide gap giving advantage to those with access to technology. -Developing countries, economies, organisation and individuals in rural areas as well as smaller organisations and people with less income/education have been held back due to access and cost. -Established organisations are now starting to become held back because they are focused more on the past then the future.

Digital Darwinism - Implies that organizations that cannot adapt to the new demands placed on them for surviving in the information age are doomed to extinction Sustaining technology - Better, faster, cheaper, products in already established markets. Produces products that customers are eager to buy, such as a faster car or a cheaper TV. Disruptive technology - A new way of doing things that initially does not meet the needs of existing customers and changes the way people have been dealing with something. Typically enter at low end of marketplace then evolves to displace competitors Examples: PCs, word processing S/W, the Internet First movers and fast-copiers (followers) (Remember Porter’s 5 forces) First-movers – inventors of disruptive technologies (threat of new entrants) Fast-copiers– firms with the size and resources to capitalize on that technology Companies that capitalized on disruptive technologies  Apple, iPad, iPod, iPhone  Intel, low end microprocessors  IBM, mini computers, personal computers etc.

Web 2.0 - Is a second generation of the World Wide Web that is focused on the ability for people to collaborate and share information online. For example, a blog is a web 2.0 application that enables people to collaborate and share their thoughts, ideas and suggestions online. Business 2.0 Tool for collaborating. 

Blog - an online journal that allows users to post their own comments, graphics...