Information system 123 (mid term summary) PDF

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WEEK 2 :Information system and competitive advantageNichols Carr: proprietary advantage Carr proposes that competitive advantage may not be achieved by the use of informationsystems alone. Information systems are “infrastructure” technologies, like highways, phone networks,and railroads. It is only ...

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WEEK 2:

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Informa Information tion ssystem ystem and competitive advantage Nichols Carr: proprietary advantage •

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Carr proposes that competitive advantage may not be achieved by the use of information systems alone. Information systems are “infrastructure” technologies, like highways, phone networks, and railroads.

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It is only considered as a competitive advantage when information systems is applied in “proprietary” An example of proprietary applications: ERP, CRM, data warehouses.

Value chain o A series (chain) of activities that an organisation performs to transform input is increased. ▪ the value of the input is increased Supply chain o Key value chain in a manufacturing organisation Supply chain management (SCM): o Encompasses all the activities required to get the right product into the right consumer’s hands in the right quantity at the right time and at the right cost.

Informa Information tion ssystems ystems and the organisation •

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Organisation: a group of people that is structured and managed to meet its mission or set of group goals o There are relationships between members of the organisation and their various activities o Processes are defined that assign roles, responsibilities, and authority to complete the various activities Organisations are open systems o They affect and are affected by their surrounding environments

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Supply chain organisations are “linked” together through both physical flows and information flows o Physical: supplies and raw materials o Information: participants communicating their plans, coordinating their work, and managing the efficient flow of goods and material

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The information system can play an integral role in the supply chain process: o Providing input o Aiding product transformation o Producing output

How does organisati organisational onal strategy determi determine ne information systems stru structur ctur cture? e? • • •

Organisation’s goals and objectives are determined by its competitive strategy. Competitive strategy determines information system structure, features and functions. (withholding for the moment my reservations about whether it still makes sense to speak of organisation strategy and information system strategy as independent concepts.)

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The information systems strategy triangle suggests… Business strategy drives all other strategies Organisational and information strategy are then dependent upon the business strategy Changes in any strategy requires changes in the others to maintain balance I.S strategy is affected by the other strategies a firm uses. I.S strategy always involves consequences

Porter’s five comp competitiv etitiv etitive e forces • • • • •

Threat of new entrants Bargaining power of suppliers Threat of substitute products or services Bargaining power of buyers Rivalry among existing competitors

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Assessing an industry structure is based on five questions:

How does organisati organisational onal strategy determi determine ne information systems stru structure? cture?

1. How much bargaining power do customers have? 2. How much of a threat do substitution products or services pose? 3. How much bargaining power do suppliers have? 4. How great is the threat of new competitors entering the marketplace? 5. How great is the rivalry among existing firms?

Porter’s four competitiv competitive e strategies Porte Porter’s r’s competitive strategy m model odel •

Firms engage in one of four competitive strategies: 1. Cost leader across the industry 2. Differentiate products across the industry 3. Cost leader within a focused industry segment 4. Differentiate product within a focused industry segment.

Power of buyers • •

Porter’s four competitiv competitive e strategies • • •

Buyer’s group is concentrated-purchases large percentage of the seller’s sales Buyers have great choice, alternatives are easy to find Low switching costs Buyers can produce parts of the products themselves The product is not important if the quality of the product is made by buyers

Power of suppliers •

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To be effective, organisational goals, objectives, culture and activities must be consistent with organisation strategy.

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Supplier concentration – a small number of companies compared to the industry to which they sell No substitute products to compete with their product The buyer is not one of the supplier’s important customers The products of the suppliers are very important for the success of the buyer’s business High switching costs – e.g. differentiated products

New Entrants •

Barriers to entry o Brand identification and customer loyalty o Required start-up costs – e.g. infrastructure, advertising o Switching costs for customers o Government polices o Access to distribution channels

Two ways to respond to the five competitiv competitive e for forcc es 1. •

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Rivalry among existing comp competitors etitors Number of existing competitors and existence of dominant players

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Slow industry growth Lack of differentiation or low switching costs

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High strategic stakes – expansion or high market share Barriers to exit o Specialized assets o Fixed costs of exit o Fixed costs of exit o Strategic interrelationships o Government and social restrictions

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Threat of substitute pro produc duc ducts ts •

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Buyers may find alternative products or services that do the same thing or provide the same service. Competitors may develop substitute products. The more proprietary a product, the more difficult it will be for competitors to develop substitutes. When there are many substitutes, cost is the only means of competition e When there are few substitutes, quality and differentiation matter

Competitive techniqu technique es

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Competitive advantage via products: o Creating new products or services o Enhancing existing products or services o Differentiating products and services from those of competitors Information systems can help create a competitive advantage by being part of the product or by providing support to the product.

Gaining competitive advantage by using business processes o Lock in customers via high switching costs: make it too expensive for customer to switch to a competitor o Lock in suppliers be easy to connect to and work with o Establish alliances with other organisations: establish standards, promote product awareness and needs, develop market size, reduce purchasing costs and provide other benefits o Reduce costs: enable reducing prices and/ or increasing profitability. Increased profitability means more cash to fund further infrastructure development and greater competitive advantage. Information system are widely used to manage and support business processes

Porter and value ch chaa in Value Chain •

Competitive strategy is implemented by creating value. o Value: amount of money a customer is willing to pay for a resource, product or service o Margin: difference between value an activity generates and cost of activity o Value chain: a network of value-creating activities: ▪ Primary activities ▪ Support activities

Primary activities in the vvaa lue chain •

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Inbound logistics: receiving, handling raw materials and other inputs: o Value is in parts, time required to contact vendors, maintaining relationships with vendors, ordering parts, receiving shipments and so forth Operations: transform or assemble materials into finished products Outbound logistic: deliver finished products to customers Marketing and sales: create marketing strategies and sell products or services to customers Services: after-sale customer support

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How do information system systemss create value? Value and value cr cre e ation •

Support activities in the value ch chain ain •

Contribute indirectly to production, sale and service of product: o Procurement finding vendors, setting up contractual arrangements and negotiating prices o Technology developments research and development, developing new techniques, methods and procedures o Human resources recruiting, compensation, evaluation and training of full-time and part-time employees o Firm infrastructure general management, finance accounting. Legal and government affairs.

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Value chain linkag linkages es •

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Linkages are the interactions across the value activities. o Example – manufacturing systems use linkages to reduce inventory costs: sales forecasts to plan production; production plan to determine raw materials needs; material needs to schedule purchases. End result is just-in-time inventory, which reduces inventory sizes and costs. Business process design: o Uses value chains and their linkages to create integrated, cross-departmental business systems.

– Organisations should not automate or improve existing functional systems. Rather, they should create new, more efficient business processes that integrate activities of all departments involved in a value chain.

Value must be created. o The laws of the universe demand it – entropy and the second law of thermodynamics o The creative urge is a unique aspect of human nature o The act of creation requires an infusion of energy to reverse the entropy in a system. (this may only be done locally; the global entropy will always increase). o In business, this means value may only be created by an expenditure of energy, effort, and resources I.S help firms address their internal and external circumstances. Therefore, value may be created both internally and externally. I.S help managers to maximize the output of the value chain. I.S enable firms to gain advantage over the competition. o Competition is relative, just as value is.

Value and value systems • • •

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A value system is a set of priorities that defines the relative importance of things Value systems, by definition, seek to explain the relative importance of things Therefore, the value of any given things is an assessment of its relative importance to other things o May be a subjective or an objective assessment Value systems, also by definition, seek to explain anomalies within their own established “rules” or priorities.

Models of organisation cha change nge

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Organisation cultur culture e and chang change e • •

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Culture: a set of major understandings and assumptions shared by a group Organisation culture: the major understandings and assumption for a business, corporation, or other organisation Organisation change: how organisations plan for, implement, and handle change Soft side of implementing change: involves work designed to help employees embrace a new information system and way of working. Change management model o Describe the phases an individual or organisation goes through in making a change o Provides principles for successful implementation of change o There are a number of models for dealing with the soft side of implement change

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A theory that proposes that every organisational system is made up of four main components – people, tasks, structure, and technology – with an interaction among the four components o Any change in one of these elements will necessitate a change in the other three elements Organisational learning o The adaptations and adjustments based on experience and ideas over time o Adjustments can require reengineering or can result from continuous improvement. Leavitt’s diamond

Lewin’s change m mode ode odell •

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Lewin’s change model consists of a three-stage approach for change o Unfreezing: preparing for change o Moving: making the change o Refreezing: institutionalizing

Lewin extended his change model theory to include force field analysis o Identifies both the driving (positive) and restraining (negative) forces that influence whether change can occur Driving forces: belief, expectations, and cultural norms that tend to encourage a change and give it momentum Restraining forces: those that make it difficult to accept a change or to work to implement change.

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User satisfaction and technology acceptance o Technology acceptance o Specifies the factors that can lead to better attitudes about the information system

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Diffusion of innovation theory o A theory developed by E.M Rogers o Explains how a new idea or product gains acceptance and diffuses (or spreads) through a specific population or subset of an organization o Adoption of nay innovation does not happen all at once for all members of the targeted population, rather it is a drawnout process. With some people quicker to adopt the innovation than others.

What is cloud computin computing? g? •

Cloud Computing is a general term used to describe a new class of network-based computing that takes place over the Internet, o Basically, a step up from utility computing o Cloud Computing is a general term used to describe a new class of network-based computing that takes place over the Internet, o Cloud Computing is a general term used to describe a new class of network-based computing that takes place over the Internet, o Cloud Computing is a general term used to describe a new class of network-based computing that takes place over the Internet,

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In addition, the platform provides on demand services, that are always on, anywhere, anytime and anyplace. Pay for use and as needed, elastic demand o scale up and down in capacity and functionalities The hardware and software services are available to o general public, enterprises, corporations and businesses markets The Cloud is the primary infrastructure for the Internet of Things

WEEK 3: CLOUD COMPUTING The internet of things •

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Internet of things (I.O.T) o A network of physical objects (things) embedded with sensors, processors, software, and network connectivity capability to enable them to exchange data with the manufacturer of the device, device operators, and other connected devices Sensor: a device that is capable of sensing something about its surrounding such as o Pressure, temperature, humidity, pH level, motion, vibration, or level of light Examples of using sensors and the IoT to monitor and control key operational activities: o Asset monitoring o Construction o Agriculture o Manufacturing o Monitoring parking spaces o Predictive Maintenance o Retailing o Traffic monitoring

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Internet of everything is pervasive, comprehensive IoT Think “minority Report” or “Gattaca” Will require advance data networks, perhaps even better than 5g Humans will have their bodies enhanced by biotechnology, which will be integrated with ioe A necessary precursor to smart cities and utopian societies

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Cloud overview • Cloud computing is an umbrella term used to refer to Internet based development and services • A number of characteristics define cloud data, applications services and infrastructure: o Remotely hosted: Services or data are hosted on remote infrastructure. o Ubiquitous: Services or data are available from anywhere. o Commodified: The result is a utility computing model similar to traditional that of traditional utilities, like gas and electricity - you pay for what you would want!

Cloud computing c haracteristics •

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Software as a servic service e (SaaS) SaaS is a model of software deployment where an application is hosted as a service provided to customers across the Internet. SaaS alleviates the burden of software maintenance/support o but users relinquish control over software versions and requirements. Terms that are used in this sphere include o Platform as a Service (PaaS) and o Infrastructure as a Service (IaaS)

VIrtualisation Cloud computing sservice ervice layers

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• Basic cloud chara characc teristic •

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The “no-need-to-know” in terms of the underlying details of infrastructure, applications interface with the infrastructure via the APIs. The “flexibility and elasticity” allows these systems to scale up and down at will o utilising the resources of all kinds ▪ CPU, storage, server capacity, load balancing, and databases The “pay as much as used and needed” type of utility computing and the “always on!, anywhere and any place” type of network-based computing. The Cloud is transparent to users and applications, it may be built in multiple ways o branded products, proprietary open source, hardware or software, or just offthe-shelf PCs. In general, they are built on clusters of PC servers and off-the-shelf components plus Open Source software combined with in-house applications and/or system software.

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Virtualization refers to how the boundaries and interfaces between systems and devices may be defined in ways other than by physical location and physical properties. Virtual workspaces: o An abstraction of an execution environment that can be made dynamically available to authorized clients by using well-defined protocols (multiple workspaces may be managed by a single physical machine). Virtual Machines (VMs): o Abstraction of a physical host machine (a single physical machine can emulate several virtual machines) Virtual Network o Abstraction of a network (e.g. a multinode network may be defined, configured and operated all within a single physical machine, or on several physical machines). “Digital Twins” are essentially virtual persons.

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Advantages of virtual machines: o Run operating systems where the physical hardware is unavailable, o Easier to create new machines, backup machines, etc., o Software testing using “clean” installs of operating systems and software, o Emulate more machines than are physically available, o Timeshare lightly loaded systems on one host, o Debug problems (suspend and resume the problem machine),

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Easy migration of virtual machines (shutdown needed or not). Run legacy systems!

What is the purpo purposse and be benefits? nefits? •

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Cloud computing enables companies and applications, which are system infrastructure dependent, to be infrastructure-less. By using the Cloud infrastructure on “pay as used and on demand”, any business may save on capital and operational investment. Clients can: o Put their data on the platform instead of on their own desktop PCs and/or on their own servers. o They can put their applications on the cloud and use the servers within the cloud to do processing and data manipulations etc.

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Why is it becoming a Big Deal? o Using high scale/low-cost providers, o Any time/place access via web browser, o Rapid scalability; incremental cost and load sharing, o Can forget need to focus on local IT. Concerns: o Performance, reliability, and SLAs, o Control of data, and service parameters, o Application features and choices, o Interaction between Cloud providers, o No standard API – mix of SOAP and REST! o Privacy, security, compliance, trust…

Cloud storage •

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Several large Web companies are no...