Management Information Systems - Lecture notes, lectures 1 - 12 PDF

Preview

Summary

detailed summary of all chapters and lectures covered throughout the course...

Description

Information Systems & Business Strategy 09/11/2014 

Information Systems (IS)  Any computer-based tool that people use to work with information and that supports the information and information processing needs 

of an organization An IS can be an important enabler of business success and innovation

 

Management Information Systems (MIS)  The function that plans for, develops, implements, and maintains IS hardware, software, and applications that people use to support the 

goals of an organization MIS is a business function, similar to Accounting, Finance, Operations, and HR

    

These 3 things are NOT the same: Data – raw facts that describe the characteristic of an event Information – data converted into meaningful and useful context Knowledge – information that can be enacted upon (actionable

information)   People use Information Systems to transform Data into Information and Information into Knowledge.   IS Cultures 

Organizational information cultures include:  Information-functional culture   

Information-sharing culture Information-inquiring culture Information-discovery culture

 

IS Roles & Responsibilities Chief Information Officer (CIO)  Oversees all uses of IT and ensures the strategic alignment of IT 

with business goals and objectives Increasing enterprise growth, attracting and retaining new customers, reducing costs, innovation, delivering operational



 



results, improving efficiency and profitability. Attracting and retaining the workforce, improving marketing and sales, expanding into new markets Chief Knowledge Officer (CKO)  Responsible for collecting, maintaining, and distributing the organization’s knowledge Chief Privacy Officer (CPO)  Responsible for ensuring the ethical and legal use of info Chief Security Officer (CSO)  Responsible for ensuring safety of IT resources including data, hardware, software, and people Chief Technology Officer (CTO)  Responsible for ensuring the throughput, speed, accuracy, availability, and reliability of IT

 

The Gap Between Business Personnel and IS Personnel  Business personnel possess expertise in functional areas such as  

marketing, accounting, and sales IS personnel have the technological expertise This typically causes a communications gap between the business personnel and IS personnel

Business Strategy

Identifying Competitive Advantage To survive and thrive an organization must create a competitive advantage. Competitive Advantage  A product or service that an organization’s customer place a greater 

value on than similar offerings from a competitor First-Mover Advantage  Occurs when an organization can significantly impact its market share by being first to market with a competitive advantage



Organizations watch their competition through environmental

scanning.  Environmental Scanning  The acquisition and analysis of events and trends in the environment external to an organization  

Three common tools used in industry to analyze and develop

competitive advantages include: 1. Porter’s Five Forces Model 2. Porter’s Three Generic Strategies 3. Value Chains   1. Michael Porter’s Five Forces Model (figure 1.13)  Buyer Power  The ability of buyers to affect the price of an item Switching Cost o Manipulating costs that make customers reluctant to switch to another product Loyalty Program

o Rewards customers based on the amount of business they do with a particular organization 

Supplier Power (figure 1.14)  High when buyers have few choices of whom to buy from and low when their choices are many Supply Chain o Consists of all parties involved in the procurement of a 

product or raw material Organizations can create a competitive advantage by locating alternative supply sources (decreasing supplier power) through B2B marketplaces B2B Marketplace – an internet-based service that brings together many buyers and sellers o Private Exchange – single buyer posts its needs and then opens the bidding to any supplier who would care to bid o Reverse Auction – an auction format in which increasingly lower bids are solicited from organizations willing to supply the desired product or service

 

Threat of Substitute Product of Service  High when there are many alternatives to a product or service and 

 

low when there are few alternatives Threat is reduced when switching costs are high

Threat of New Entrants  High when it is easy for new competitors to enter a market and low when there are significant entry barriers o Entry Barriers – a feature of a product or service that customer have come to expect and entering competitors must offer the same for survival

 

Rivalry Among Existing Competitors  High when competition is fierce in a market and low when competitors are more complacent

o Product Differentiation – occurs when a company develops unique differences in its products or services with the intent to influence demand  

2. Three Generic Strategies for Creating a Business Focus (fig.

1.15) 

Based on Cost Strategy and Competitive Scope axis, the three generic strategies are: i. Cost Leadership (low cost, broad market) ii. Differentiation (high cost, broad market) iii. Focused Strategy (ranging cost, narrow market)

     3. Value Chain Analysis – Executing Business Strategies (fig. 1.18)  Business Process – a standardized set of activities that 

accomplish a specific task, such as a specific process Value Chain Analysis – views a firm as a series of business



processes that each add value to the product or service Value creating, with the Porter’s Five Forces (fig. 1.19)

 

Business-Driven IS’ and Business Strategy  The Five Forces Model, Three Generic Strategies and Value Chain 

allow business to assess competitive advantage IS’ collect the data from from the business processes activities and



provide analysis to give organizations insight into ways to behave more competitively IS’ are not used on their own. They are driven by the need of business for fast, accurate and insightful information

Decision Making & Business Processes 

  

09/11/2014

Making Good business decisions  Analyze large amounts of information  Apply sophisticated analysis techniques  Make decisions quickly  Protect the corporate asset of organizational information Operational Employees develop, control and maintain core business activities req’d

to run the day to day operations  Structured Decisions o Situations where establish processes offer potential solutions   

Managerial Employees evaluate company operations to identify adapt to and

leverage change  Semi-structured o Occur in situations in which a few established process help to evaluate potential solutions.. pg 30   

Strategic Managers develop overall strategies, goals & objectives  Unstructured decisions o Occurs in situations in which no procedures of rules exist to guide decision makers towards the correct choice

 



Pg 32 Metrics  Measurements that evaluate results to determine whether a project is meeting its goals Common types:



KPIs – Key Performance Indicators (The quantifiable metrics a company uses to evaluate progress toward critical factors) o Turnover rates of employees o Number of product returns o Number of new customers o Average customer spending

 

Efficiency and Effectiveness Efficiency Metrics - Measure the performance of IS itself, such as

throughput, transaction speed, and system availability  Common types of Efficiency IS Metrics  Throughput o Amount of info that can travel through a system at any point  



in time Transactions Speed o Amount of time a system takes to perform a transaction Web Traffic o Includes a host of benchmarks such as the number of page visits, and the average time spent viewing a web page Response Time o Time it takes to respong to user interactions such as a mouse click

 Effectiveness Metrics - Measures the impact IS has on business processes and activities, including customer satisfaction and customer conversation rates Common types of Effectiveness IS Metrics  Usability o The ease with which people perform transactions and / or find 



info Customer Satisfaction o Measured by such benchmarks as satisfaction surveys, customer retention percentages and increasing revenue per customer Conversion Rates

o Number of customers an organization “touches” for the first 

time and persuades to purchase a product / service Financial o Such as RoI (earning power of an organization’s assets), Cost/Benefit Analysis and Break Even Analysis

Benchmark – Baseline values the system seeks to attain Benchmarking – a process of continuously measuring system results, comparing those results to optimal system performance (benchmark values), and identifying steps and procedures to improve system performance Transaction Processing Sytems Transactional Processing Systems (TPS)  Basic business system that serves the operational level and assists 

in making structured decisions Online Transaction Processing (OLTP)  Capturing of transaction and event information using technology to



process, store, and update Source Document  The original transaction record

Decision Support Systems Decision Support System (DSS)  Models information to support managers and business professionals 

during the decision making process Online Analytical Processing (OLAP)  Manipulation of information to create business intelligence in support of strategic decision making



Three Quantitative Models Used by DSS Include: i. What-if Analysis ii. Sensitivity Analysis



iii. Goal-seeking Analysis Slide 25 shows interaction between TPS and DSS

 

Digital Dashboards  Integrates information from multiple components and presents it in 

a unified display Verizon’s “Wall of Shaygan” updates every 15 seconds with the company’s performance

 

Artificial Intelligence (AI) – Simulates human intelligence such as

the ability to reason and learn  Intelligence System – Various commercial applications of artificial intelligence  5 Most Common Categories of AI include:  Expert System  Computerized advisory programs that imitate the reasoning 



processes of experts in solving difficult problems Neural Network  Attempts to emulate the way the human brain works  Most useful for decisions that involve patterns or image recognition o Fuzzy Logic – a mathematical method of handling imprecise or subjective info Genetic Algorithm  AI system that mimics the evolutionary, survival-of-the-fittest process to generate increasingly better solutions to a problem (shopping bot)

 

Intelligent Agent  Special purpose knowledge based information system that accomplishes specific tasks on behalf of its users

 

Virtual Reality  A computer-simulated environment that can be simulation of the real or imaginary world

  

2.2 Business Processes



Make sure IS actually fits processes (accounting / finance,

environmental, HR, MIS)   Customer Facing Processes – result in a product or service that is received by an organization’s external customer  Business Facing Processes – invisible to the external customer but are essential to the effective management of the business   5 Step Order-to-Delivery Process, Slide 39   Business Process Re-Engineering  Business Process – standardized set of activities that accomplish 

specific tasks, such as processing customers order Business process improvement – attempts to understand and



measure current processes and upgrade them Business Process Re-Engineering (BPR) – analysis and redesign of workflow within and between enterprises

   

Business Process Modelling (textbook pg 48)

Business and the Internet  

09/11/2014

Disruptive Technology Digital Darwinism – implies that organizations which cannot adapt to

the new demands placed to the new demands placed on them for surviving in the information age are doomed to extinction   

Disruptive vs. Sustaining Technology Disruptive Technology – a new way of doing things that opens new

markets and destroys old one  Sustaining Technology – produces improvements to product that customers are eager to buy   The Internet – Disruptive Business Technology  One of the biggest forces changing business is the Internet  Organizations must be able to transform as markets, economic 

environments, and technologies change Focusing on the unexpected allows an organization to capitalize on the opportunity for new business growth from a disruptive



technology Has impacted almost every industry; auto, publishing, financial services, retail

 

Evolution of the Internet  The Internet began as an emergency military communications 

system operated by the U.S. Department of Defense Gradually the internet moved from a military pipeline to a communication tool for scientists to business o Internet – computer networks that pass information from one to another using common computer protocols o Protocol – standards that specify the format of data as well



as the rules to be followed during transmission World Wide Web (WWW) – a global hypertext system that uses



the internet as its transport mechanism Hypertext Transport Protocol (HTTP) – the Internet standard



that supports the exchange of information on the WWW Reasons for growth; figure 3.6



The internet makes it possible to perform business in ways not



previously imaginable It can also cause a gap between winners and losers in the game of business o Digital Divide – when those with access to technology have great advantages over those without access to technology o Web 2.0 – a set of economic, social, and technology trends that collectively form the basis for the next generation of the Internet

Mashups  Website or web application that uses content from more than one source to create a completely new product or service o Application programming interface o Mashup Editor  

Web 3.0  Based on “intelligent” Web applications using natural language processing, machine-based learning and reasoning, and intelligence 



applications Semantic Web – structuring data so web pages describe things in a way that computers can “understand” and, thus, find, share, and integrate ideas more effectively for people The Semantic Web encompasses one or more of the following: o Transforming the web into a database o An Evolutions Path to artificial intelligence o The realization of the semantic Web and SOA (ServiceOriented Architecture) o Evolution toward 3D



Accessing Internet Information  Four tools for accessing Internet information i. Intranet – internalized portion of the Internet, protected form outside access, for employees ii. Extranet – an intranet that is available to strategic allies iii. Portal – Web site that offers a broad array of resources and services



iv. Kiosk – publicly accessible computer system that allows interactive information browsing Providing Internet Information  Three common forms of service providers i. Internet Service Provider (ISP) – Provides individuals and other companies access to the Internet  Wireless Internet Service Provider (WISP)  Common ISP services include:  Web Hosting   

Hard-disk Storage Space Availability Support

ii. Online Service Provider (OSP) – offers and extensive array of unique Web services



iii. Application Service Provider (ASP) – offers access over the internet to systems and related services that would otherwise have to be located in organizational computers ISPs, OSPs, and ASPs use service level agreements (SLA) which define the specific responsibilities of the service provider and set the customer expectations

  

E-Business Basics How do e-commerce and e-business differ?  E-Commerce – the buying adns elling of goods and services over 

the internet E-Business – the conducting of business on the internet including not only buying and selling, but also serving customers and collaborating with business partners



Mass Customization – the ability of an organization to tailor its



products or services to the customers’ specifications Personalization – occurs when a company knows enough about a customer’s like and dislikes that it can fashion offers more likely to appeal to that person

 

Opening New Markets  The Long Tail – refers to the tail of a typical sales curve (figure 

3.13, 3.14) Intermediary – agents, software, or businesses that provide a trading infrastructure to bring buyers and sellers together o Disintermediation o Re-intermediation o Cybermediation



Further Advantages of E-Business  Reducing Costs – business processes that take less time and 

human effort Improving Operations – communication customized to meet



consumer needs and available 24/7 Improving Effectiveness – web sites must increase revenue and



new customers and reduce service calls Interactivity Metrics – measure E-Business success: number of



repeat visits, times spent on site and number of pages viewed among other activities Improving Effectiveness through E-Business Marketing o Associate (Affiliate) Programs o Banner Ads o Tracking Click-Through o Cookies o Pop-Up Ads o Viral Marketing



Measuring Website Success  Stickiness – visit duration time  Raw Visit Depth – total Web page exposures per session  Unidentified Visitor – no info about visitor is available  Unique Visitor – recognized and counted once in a period of time  Identified Visitor – can be tracked across multiple web visits  Hits – a single request made by a visitor to view a web page



Business Models  Types of Businesses: o Brick and Mortar – physical store, no web site o Pure-Play (Virtual) – only online o Click and Mortar – physical and online  E-Auctions are a successful E-Business model o Forward Auction – seller offers to many buyers who bid with the highest bid winning the product o Reverse Auction – buyer specifies product or service an lowest seller bid wins contract

Business-to-Business (B2B)  Electronic Marketplace (E-Marketplace) o Interactive business communities providing a central market



where multiple buyers and sellers can engage in e-business activities Business-to-Consumer (B2C)  Common B2C e-business models include: o E-Shop – a version of a retail store where customers can shop any time without leaving their home (also called e-store or e-tailing)

o E-Mail – consists of a number of e-shops; it serves as a gateway through ...