CHAPTER 6

ORGANIZATIONAL INFORMATION

• Employees must be able to obtain and analyze different levels, format ans granularities of organizational information to make daily decisions.
• Collecting, compiling, sorting and analyzing information provide tremendous insight into how an organization is performing.

Level, format and granularities of organizational information

• Transactional information verses analytical information

THE VALUE OF TIMELY INFORMATION

• Timeliness is an aspect of information that depends on the situation.

- Real time information: immediate, up to date.

- Real time system : provides real time information in response to query resquests.

THE VALUE OF QUALITY INFORMATION

• Business decisions are only good as the quality of the information used to make decisions.
• Characteristics of high quality information : 

- Accuracy

- Completeness

- Consistency 

- Uniqueness

- Timeliness

UNDERSTANDING THE COSTS OF POOR INFORMATION

• The 4 primary sources of low quality information :

- Online customers intentionally enter inaccurate  information to protect their privacy.

- Information from different system have different entry  standarts and formats.

- Call centre operators enter abbreviated or erroneous information by accident or to save time.

- Third party and external information contains inconsistencies, inaccuracies and errors.

• Potential business effects resulting from low quality information included :

- Inability to accurately track customers.

- Difficulty to identify valuable customers.

- Inability to identify selling opportunities.

- Marketing to nonexistent customers.

- Difficulty tracking revenue due to inaccurate invoices.

- Inability to build strong customer relationship.

UNDERSTANDING THE BENEFITS OF GOOD INFORMATION

• High quality information can significantly improve the chances of making good decisions.
• Good decisions can directly impact an organization bottom line.

 

CHAPTER 5

ORGANIZATIONAL STRUCTURE

• Organizational employees must work together to develop strategic initiatives that create competitive advantages.
• Ethics and security are fundamental building block that organizations must base their business upon.

IT ROLES AND RESPONSIBILITIES

• Recent IT related strategic positions :

- Chief Information Officer (CIO)

- Chief Technology Officer (CTO)

- Chief Security Officer (CSO)

- Chief Privacy Officer (CPO)

- Chief Knowledge Office (CKO)

• Chief Information Officer (CIO) - oversees all uses of IT and ensures the strategic alignment of IT with business goals and objectives.
• Broad CIO function included : 

- Manager ensuring the delivery of all IT projects on time amd within budget.

- Leader ensuring the strategic vision of IT is in line with the strategic vision of the organization.

- Communicator building and maintaining strong executive relationships.

• What concert CIO the most

• Chief technology officer (CTO) - responsible for ensuring the throughput, speed,accuracy, availability and reliability of IT.
• Chief Security Officer - responsible for ensuring the security of IT system.
• Chief Privacy Officer (CPO) - responsible for ensuring the ethical and legal use of information.
• Chief Knowledge Office (CKO) - responsible for collecting, maintaining and distributing the organization knowledge.

THE GAP BETWEEN BUSINESS PERSONNEL AND IT PERSONNEL

• Business personnel possess expertise in functional area.
• IT personnel have the technology expertise.
• Causes a communications gap between business personnel and IT persannel.

IMPROVING COMMUNICATIONS

• Business personnel must seek to increase their understanding of IT.
• IT personnel must seek to increase their understanding of the business.
• CIO responsible to ensure effective communication between both personnel.

ORGANIZATIONAL FUNDAMENTAL- ETHICS AND SECURITY

• Ethics and security are two fundamental building block that organizations must base their businesses on to be successful.

ETHICS

• Ethics is the principles and standarts that guide behaviour towards other people.
• Privacy is major ethical issue

-Privacy is the right to be left alone when you want to be, to have control over your own personel possessions and not to be observed without your consent.

• Issues affected by technology advance

- Intellectual property : intangible creative work that in physical form.

- Copyright : the legal protection afforded an expression of an idea.

- Fair use doctrine : in certain situations, it is legal to use copyrighted software.

- Pirated software : the unauthorized use, duplication, distribution of sale of copyrighted software.

- Counterfeit software : software that is manufactured to look like the real thing and sold as much.

SECURITY

• Organizational information is intellectual capital that must be protected.
• Information security security - the protection of information from accidental or intentional misuse by person inside oe outside an organization.
• E-business automatically creates tremendous information security risks for organization.

CHAPTER 4

MEASURING INFORMATION TECHNOLOGY'S SUCCESS

• Key performance indicator-measure that are tied with business drivers.
• Metrics are detailed measures that fed KPI.

EFFICIENCY AND EFFECTIVENESS

• Efficiency IT metric-measures the performance of IT system.
• Effectiveness IT metric-measures the impact of IT on business process and activities.

BENCHMARKING-BASELINES METRICS

• Benchmarks are baselines values that system seek to attain.
• Benchmarking- a process of continously measuring system result to optimal system performance, identify step and procedure to improve system performance.

THE INTERRELATIONSHIPS OF EFFICIENCY AND EFFECTIVENESS IT METRICS

• Efficiency IT metric focus on technology and included:

- Usability

- Customer satisfaction

- Conversion rates

- Financial

EFFECTIVENESS IT METRICS

• Usability-The ease with which people perform transaction or find information, which measures the number of clicks required to find desired information.
• Customer satisfaction- Measures by benchmarks as satisfaction survey, percentage by existing customer retained and increase in revenue per customer.
• Conversion rates- The number of customer an organization "touches" for the first time and persuades to purchase its product or services.
• Financial- Such as return on investment,cost-benefit analysis (the comparison of project revenue and cost including development, maintenance, fixed and variable) and break even analysis (point at constant revenue equal to ongoing cost.) 

1.  Security is issue for organization offering products or services over the internet.

- However to be effective , it must implement Internet security.

- Secure Internet connection must offers encryption and Secure Sockets Layers (SSL denoted by the lock symbol in the lower right corner of a browser)

Metrics for Strategic Initiatives

• Metrics for measuring and managing strategic initiatives included:  

- Web site metrics

- Supply Chain Management metrics (SCM)

- Customer Relationship Management metrics (CRM)

- Business process reengineering metrics ((BPR)

 - Enterprise Resource Planning metrics (ERP)

Web Sites Metrics

Web sites metrics included:

- Abandoned shopping card

- Click through

- Conversion rates

- Cost per thousand

- Page exposures

- Total hits

- Unique visitors

• Abandoned registrations- number of visitors who starts the process of completing a registration page and then abandon the activity.
• Abandoned shopping carts- number of visitors  who create a shopping carts, start shopping and then abandon the activity before paying for the merchandise.
• Click through- count the number of people of visit a sites, click on ad and taken to the sites of the advertiser.
• Conversion rates- percentage of potential customer who visit a sites  and actually buys something.
• Cost per thousand (CPM)- Sales dollar generated per dollar of advertising. This is commonly  used to make the case for spending money to appear on a search engine.
• Page exposures- average number of pages exposures to individual visitor.
• Total hits- number of visits to a web sites,many may be by the same visitor.
• Unique visitors- number of unique visitors of a sites in a time given. It commonly used to rank the most popular web sites.

Supply Chain Management metrics

• Back order-is demand against an item whose current stock level is insufficient to satisfy demand.
• Customer order promised cycle time- the anticipated or agree upon cycle time of a purchase order.
• Customer order actual cycle time- the average time it takes  to fill a customer purchase order.
• Inventory replenishment cycle time- measure of the manufacturing cycle time plus the time included to deploy the product to the appropriate distribution center.
• Inventory turnover- the number  of times that company inventory cycles or turn over per year.It is one of the most commonly used supply chain management.

Customer Relationship Management Metrics

• Measures  user satisfaction and interaction and include:

- Sales metrics

- Service metrics

- Marketing metrics

BPR and ERP metrics

• The balanced scorecard enables organizations to measures and manage strategic initiatives.

Chapter 3

STRATEGIC INITIATIVES

• Organization can undertake high-profile strategic initiative including:

-Supply Chain Management (SCM)
-Customer relationship management (CRM)
-Business process reengineering (BPR)
-Enterprise resource planning (ERP)

SUPPLY CHAIN MANAGEMENT

• Involves the management of information among stages in a supply chain to maximize effectiveness and profitability of total supply chain.
• There are four basic component of supply chain management include:

1. Supply chain strategy-strategy for managing all resources to meet customer demand.
2. Supply chain partner-partners throughout the supply chain that deliver final goods, raw materials and services.
3. Supply chain operation-schedule for production activities.
4. Supply chain logistic-product delivery process.

• Effective and efficient SCM system enable to:

-Decrease the power of buyers
-Increase its own supplier power
-Increase switching cost
-Create entry barriers
-Seeking competitive advantages through cost leadership

CUSTOMER RELATIONSHIP MANAGEMENT

• Involves managing all aspect of a customer relationship with an organization to increase customer loyalty and retention.

• CRM is not just technology but a strategy, process and business goal.
• CRM can enable an organization to:

-Identify type of customer
-Design individual customer marketing campaign
-Understand customer behavior

BUSINESS PROCESS REENGINEERING

• Business process-a standardized sets of activities that accomplish specific task.
• Business process reengineering(BPR)- the analysis and redesign between enterprise.

-The purposes of BPR is to make all business best in class.

 

OPPORTUNUTY OF BPR

• A company can improve the way to travel by walking to horse and horse to a car.
• A company also taking different path likes an airplane which completely did not use road anymore. 

ENTERPRISE RESOUCE PLANNING

• ERP is integrates all department and function throughout organization into IT system.
• So employees can make decision by viewing enterprisewide information.

• ERP system collect data from across an organization and also correlates the data generating.

CHAPTER 2

IDENTIFYING COMPETITIVE ADVANTAGES

• To survive, an organization must create competitive advantages.

- Competitive advantage - a product or services that place a greater value to customer than similar offering from a competitor.

- First mover advantage - occurs when an organization give impact to its market share by being first with a competitive advantages.

• Organizations watch their competitor through scanning.

- Environmental scanning - analysis of events and trends in the external environment to organization.

• Three common tools to analyze and develop competitive advantages:

- Porter 's Five Forces Model

- Porter 's three generic strategies

- Values Chain

 

FIVE FORCES MODEL-EVALUATING BUSINESS SEGMENTS

 

BUYER POWER

• High when buyers have many choices and low when their choices are limited.
• Ways to reduce buyer power by loyalty programs.

- Loyalty program - rewards customers based on the amount of business they do.
- Switching cost - costa that can make customer reluctant to switch to another product or services






























SUPPLIER POWER

• High when buyers have few choices and low when their choices are many.
• Supply chain-consists of all parties involved in producing of a product or raw materials.

• Organizations that are buying goods or services can create competitive advantages through B2B marketplaces.

-Business to business(B2B) marketplace-an Internet based service that brings many buyers and sellers.

• Two types B2B marketplaces.

-Private exchange-a single buyers post its needs and open the bidding to any supplier who interesting to bid.
-Reverse auction-an auction format in increasing lower bids for willing the supplier to desired products or services at increasingly lower price.

THREAT OF SUBSTITUTE PRODUCT OR SERVICES

• High when there are many alternative to a product or service and low when there are many alternative to choose.
• Switching cost-costs that are make customers reluctant to switch another product or services.

THREAT OF NEW ENTRANTS

• High when it is easy to new competitor to enter the market and low when there are barriers to entering a market.
• Entry barrier-the expect from customer about product or service feature and must be offered by entering new market to compete and survive.

 

RIVALRY AMONG EXISTING COMPETITORS

 

• High when competition are fierce and low when competition is more complacent.
• Although competition is always intense in some industries, every industry will increased competition for the overall trend.

THE THREE GENERIC STRATEGIES-creating a business focus.

• Organization usually follow one of the Porter's three generic strategies when entering new market.
• 
   

VALUE CREATION

• Once an organization choose its strategy, it can use this tools to determined the success or failure of the strategy.
• Business process-a standardized set of activities that accomplish a specific task.
• Value Chain-views an organization as a series of processes, which adds value to a product or services for each customer.

• The competitor advantages is to:

-Target high value.
-Target low value.
-Perform some combination.



CHAPTER 1

INFORMATION TECHNOLOGY'S ROLE IN BUSINESS

Information technology is used in business.

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INFORMATION TECHNOLOGY'S IMPACT ON BUSINESS OPERATION

 

 

 

 

 

 

 

 

• Organizations typically operated by functional areas.
• All functional areas are interdependent.

 

 

 

INFORMATION TECHNOLOGY BASICS

 

• Information technology(IT) - a field that concerned the use of technology in managing and processing information.
• Information technology is important enabler of business success and innovation.
• Management information system(MIS) - a general name for the business function and academic discipline covering the application of people, technology and procedure to solved business problem.
• Business function: accounting, finance and human resources.
• Data - raw facts that described the characteristic of event.
• Information - data converted into meaningful and useful context.
• Business Intelligent - applications and technologies used to support decision making,
•  Example in system to track students:

       -Data include height, name and age.

       -Information include number of students by course and percentage of business major.

 

Data in Excel Spreadsheet

 

 

 

Data turned to information.

 

Information turned to Business Intelligent.

IT RESOURCES

• People use.
• Information technology.
• Information.

IT CULTURE

• Information-functional culture - employees use information as a influence or power over others.
• Information sharing culture - employees across departments trust each other to use information and automatically improve performance.
• Information inquiring culture - employees across department for information to better understanding in future and align with current trend and new directions.
• Information discovery culture - employees across department open to new insight about crisis and radical changes and seek way to create competitive advantages.