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Complete lecture notes from the first half of BADM 2301, Professor Chad Ho...

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Management Info Systems Tech Notes 1/22 Intro to Information Systems Technology Disruption -

The new information technologies change - How we live our everyday life - How companies do their business

4 P’s of Marketing -

Product Price Place Promotion

Technology as an Enabler -

Impacts on modern business 1. Changing the rules of the game - Sharing economy - uber, Airbnb - Crowdfunding, crowdsourcing 2. Blurring industry boundaries - Every company is an IT company - Built around smartphone ecosystem 3. Creating new forms of businesses - Platform phenomenon

IT itself is a tool, but not a silver bullet!

Semester Project Approaches to Consider -

Problem in search of solutions Solution in search of problems

Pay Attention to Changes -

Changes in technology Changed in market and consumer preference - Popularity of smartphones Changes in regulations - Legalization of marijuana

Keep in Mind Project should: - Define a new problem that has not been solved - Be business oriented - Must make financial sense - Should utilize ITs in some way

1/29 -

Data - raw records Information - organized (meaningful) values Knowledge - understanding, experience, expertise applied to problems

Information Technology -

Computer-based tool that people use to support data/information processing

5 C’s -

Capture Cradle Communicate Convey Create

(input) (store) (among IT devices) (output displayed to users) (generate new data)

Information System -

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An integrated business solution that processes data/information to support: - Core business activities - Decision making - Control, analysis, collaboration - Visualization 5 components - Hardware - Software - Network - Database - Computer-based information system

Managing Business Processes -

Evaluating business process - Do the things right = efficiency - Do the right things = effectiveness

BPI vs. BPR -

Business process improvement (BPI) - an approach to help an organization incrementally streamline its processes to achieve more e  fficient results - How can we speed up the process?

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- Introduce an app Business process reengineering (BPR) - an approach to help an organization to fundamentally redesign its processes to achieve more e  ffective results - How can we offer a replacement car right away? - Partner with a car rental company

IS’s Role in Supporting Business Processes -

Executing the process Domino's pizza tracking UPS package tracking

Advantages of IS vs. Manual Procedure -

Same time Reduce operation cost Eliminate human error Enhance data integrity - Ensuring data consistency - Eliminating data redundancy

Powerful Customers -

Consumers become more knowledgeable - Learning usage experience from others

Strategies for Competitive Advantage -

Cost leader Differentiation Innovation Operational effectiveness Customer oriented

2/26 Search Engine Analytics -

Search engine optimization (SEO) - Improves ranking of organic listings on search engines Pay-per-click advertising (PPC) - Promotes web pages by increasing their visibility through sponsored listings

Ranking Web Pages by “Importance” -

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Web pages are interconnected via hyperlinks, To measure the importance of a page, we can count the total numbers of other pags pointing to a focal pages - The metric is also referred to as votes Generally, the higher the vote, the more important However, this approach is NOT good enough

Measuring Importance of Linking Page Rank -

Idea - a page is more important of it is pointed by other important pages Logic - Number of votes is important - But, the weight of each vote is also different

Even Broader Applications -

Widely used in other contexts with networking to provide recommendation for “whom to follow” - Online dating website - Social media sites - Ecosystem in biology

Advertising Pay-Per-Click Advertising Key Metrics in PPC -

Impression - # of times an ad has been displayed

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Click through rate (CTR) - ratio of clicks to impressions Pay per click (PPC) - the price paid for every user click - Max PPC - highest amount you’re willing to pay for a click

Evolution of Online Advertising -

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From impression based… - Based on # of times the ad has been displayed - Seems fair in early days of e-commerce - Simple, but high risk for advertisers From impression to click-through-based - Based on # of times the ad has been clicked

Pricing Model -

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From fixed price - Price determined by publishers - Better position ⇒ From fixed price to auction - Prices are determined by bidders, and may change over time

How Sponsored Search Works -

Advertisers place bids to servers Surfer sends query Engine runs auctions & displays winning bids (ads) Surfer clicks Surfer lands on page

Two Popular Auction Formats -

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English auction - Simple, start with a low price - Bidding occurs through an ascending price process Dutch auction - Start with a high price - Bidding occurs through a descending price process - Buyers will also choose a quantity - Shown to have a 30% higher ending price

Different Price-Determining Mechanisms -

First-price auction - Highest bidder wins and pays the winning bid as ending price - Simple! But mya not reveal true res. Price (bid-shading)

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Second-price auction - Highest bidder still wins, but pays the 2nd highest bid - Efficient! Inducing true reservation price from each bidder Generalized second-price auction (by Google) - Highest bidder wins the 1st slot and pays the 2nd highest bid - Second-highest bidder wins the 2nd slot and pays the 3rd highest bid Penny Auction

Ad Quality Score and Ad Rank -

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Motivations - Google wants to improve long-term user experience - Maximize profits Ad Quality Score - A metric Google used to measure the quality of an ad - Based on CTR, click-through-rates (Quality = clicks ⇒ $) Ad Rank - Ad rank = Bid $ * Ad quality score - Basically, Ad rank = Google’s expected revenue - Google ranks all ads by their Ad rank (aka expected revenue) - Then applies the second-ad rank rule to derive real PPC...