CHAPTER 7 : STORING ORGANIZATIONAL INFORMATION

What is INFORMATION

Information is stored in databases.

Database – maintains information about various types of objects (inventory), events (transactions), people (employees), and places (warehouses)

Database models include:

• Hierarchical database model – information is organized into a tree-like structure (using parent/child relationships) in such a way that it cannot have too many relationships
• Network database model – a flexible way of representing objects and their relationships
• Relational database model – stores information in the form of logically related two-dimensional tables

Entity – a person, place, thing, transaction, or event about which information is stored

The rows in each table contain the entities

Attributes (fields, columns) – characteristics or properties of an entity class

The columns in each table contain the attributes

Primary keys and foreign keys identify the various entity classes (tables) in the database:

• Primary key – a field (or group of fields) that uniquely identifies a given entity in a table
• Foreign key – a primary key of one table that appears an attribute in another table and acts to provide a logical relationship among the two tables

 Database advantages from a business perspective include:

• Increased flexibility
• Increased scalability and performance
• Reduced information redundancy
• Increased information integrity (quality)
• Increased information security

A well-designed database should :

• Handle changes quickly and easily
• Provide users with different views
• Have only one physical view
• --Physical view – deals with the physical storage of information on a storage device

• Have multiple logical views
• --Logical view – focuses on how users logically access information

A database must scale to meet increased demand,  while maintaining acceptable performance levels

• Scalability – refers to how well a system can adapt to increased demands
• Performance – measures how quickly a system performs a certain process or transaction

Information integrity – measures the quality of information

Integrity constraint – rules that help ensure the quality of information

• Relational integrity constraint
• Business-critical integrity constraint

Databases offer several security features including:

• Password – provides authentication of the user
• Access level – determines who has access to the different types of information
• Access control – determines types of user access, such as read-only access

Database management systems (DBMS) – software through which users and application programs interact with a database.

Data-driven Web sites – an interactive Web site kept constantly updated and relevant to the needs of its customers through the use of a database.

 Integration – allows separate systems to communicate directly with each other :

• Forward integration – takes information entered into a given system and sends it automatically to all downstream systems and processes
• Backward integration – takes information entered into a given system and sends it automatically to all upstream systems and processes

CHAPTER 6 : VALUING ORGANIZATIONAL INFORMATION

ORGANIZATIONAL INFORMATION

• ·         Information is everywhere in an organization
• ·         Employees must be able to obtain and analyze the many different levels, formats and granularity of organizational information to make decisions
• ·         Successfully collecting, compiling, sorting and analyzing information can provide tremendous insight into how an organization is performing
• ·         Levels, formats and granularity of organizational information

THE VALUE OF TRANSNATIONAL AND ANALYTICALLY INFORMATION

• ·         Transaction information verses analytically information
  
  
  
  
  
  THE VALUE OF TIMELY INFORMATION

  
  

  ·         Timeliness is an aspect of information that depends on the situation

  §  Real-time information – immediate, up-to-date information

  §  Real-time system – provides real-time information in response to query requests

  
  

  THE VALUE OF QUALITY INFORMATION

  
  

  ·         Business decisions are only as good as the quality of the information used to make the decisions

  ·         You never want to find yourself using technology to help you make a bad decision faster

  
  

  
  

  UNDERSTANDING THE COSTS OF POOR INFORMATION

  
  

  ·         The four primary sources of low quality information include;

  
  

  §  Online customers intentionally enter inaccurate information to protect their privacy

  §  Information from different systems have different entry standards and formats

  §  Call center 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 include;

  
  

  §  Inability to accurately track customers

  §  Difficulty identifying valuable customers

  §  Inability to identify selling opportunities

  §  Marketing to nonexistent customers

  §  Difficulty tracking revenue due to inaccurate invoices

  §  Inability to build strong customer relationships

  
  

  
  

  UNDERSTANDING THE BENEFITS OF GOOD INFORMATION

  
  

  ·         High quality information can significantly improve the chances of making a good decision

  ·         Good decisions can directly impact an organization’s bottom line

  
  

CHAPTER 5 : ORGANIZATIONAL STRUCTURE THAT SUPPORT STRATEGIC INITIATIVES

ORGANIZATIONAL STRUCTURES

• ·         Organizational employees must work closely together to develop strategic initiatives that create competitive advantages.
• ·         Ethics and security are two fundamental building blocks that organizations must base their businesses upon.

INFORMATION TECHNOLOGY ROLES AND RESPONSIBILITIES

• ·         Information technology is a relatively new functional area, having only been around formally for around 40 years.

·         Recent IT – related strategic positions:

• Chief Information Officer (CIO)
• Chief Technology Officer (CTO)
• Chief Security Officer (CSO)
•  Chief Privacy Officer (CPO)
•  Chief Knowledge Officer (CKO)

·         Chief Information Officer (CIO) – oversees all uses of IT and ensures the strategic alignment of IT with business goals and objectives.

         Broad CIO functions include;

•  Manager – ensuring the delivery of all IT projects, on time and 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.

o   Chief Technology Officer (CTO) – responsible for ensuring the throughput , speed, accuracy, availability and reliability of IT

o   Chief Security Officer (CSO) – responsible for ensuring the security of IT systems

o   Chief Privacy Officer (CPO) – responsible for ensuring the ethical and legal use of information

o   Chief Knowledge Officer (CKO) – responsible for collecting, maintaining and distributing the organization’s knowledge

THE GAP BETWEEN BUSINESS PERSONNEL AND IT PRSONNEL

•  Business personnel possess expertise in functional areas such as marketing, accounting and sales
•  IT personnel have the technological expertise
• This typically causes a communications gap between the business personnel and IT personnel

IMPROVING COMMUNICATIONS

• Business personnel must seek to increase their understanding of IT
• IT personnel must seek to increase their understanding of the business
•  It is the responsibility of the CIO to ensure effective communication between business personnel and IT personnel

ORGANIZATIONAL FUNDAMENTALS – ETHICS AND SECURITY

•  Ethics and security are two fundamental building blocks that organizations must base their businesses on to be successful
• In recent years, such event as the 9/11 have shed new light on the meaning of ethics and security

ETHICS 

• Ethics – the principles and standards that guide our behavior toward other people
• Privacy is a major ethical issues;

• Privacy – the right to be left alone when you want to be to have control ever your own personnel possessions and not to be observed without your consent

• Issues affected by technology advances

PROTECTING INTELLECTUAL ASSETS

·         Organizational information is intellectual capital – it must be protected

·         Information security – the protection of information from accidental or intentional misuse by persons inside or outside an organization

·         E-business automatically crates tremendous information security risks for organization

CHAPTER 4 : MEASURING INFORMATION TECHNOLOGY'S SUCCESS

•      Key performance indicator – measures that are tied to business drivers
•      Metrics are detailed measures that feed KPIs
•      Performance metrics fall into the nebulous area of business intelligence that is neither technology, nor business centered, but requires input from both IT and business professionals

EFFICIENCY AND EFFECTIVENESS

·         Efficiency IT metric – measure the performance of the IT system itself including throughout speed and availability

·         Effectiveness IT metric – measures the impact IT has on business processes  and activities including customers satisfaction conversion rates and self-through increases

BENCHMARKING – BASELINING METRICS

·         Regardless or what is measured, how it is measured and whether it is for the sake of efficiency or effectiveness, there must be benchmarks – beseline values the system seek to attain

·         Benchmarking – a process of continuously measuring system results, comparing those results to optimal system performance and identifying to improve system performance

THE INTERRELATIONSHIPS OF EFFICIENCY AND EFFECTIVENESS IT METRICS

·         Efficiency IT metrics focus on technology and include :

ü  Throughput - the amount of information that can travel trough a system at any point

ü  Transaction speed - the amount of time a system takes to perform a transaction

ü  System availability – the number of hours a system is available for users

ü  Information accuracy – the extent to which a system generates the correct results when executing the same transaction numerous times

ü  Web traffic – includes a host of benchmarks such as the number of page views, the number of unique visitors, and the average time spent viewing a Web page

ü  Response time –the time it takes to respond to user interactions such as a mouse click

·         Effectiveness IT metrics focus on an organization’s goals, strategies, and objectives and include:

ü  Usability – The ease with which people perform transactions and/or find information. A popular usability metric on the Internet is degrees of freedom, which measures the numbers of clicks required to find desired information.

ü  Customer satisfaction – Measured by such benchmarks as satisfaction surveys, percentage of existing customers retained, and increases in revenue dollars per customer.

ü  Conversion rates – The number of customers an organization “touches” for the first time and persuades to purchase its products or services. This is a popular metric for evaluating the effectiveness of banner, pop-up, and pop-under ads on the Internet.

ü  Financial – Such as return on investment (the earning power of an organization’s assets), cost-benefit analysis (the comparison of projected revenues  and costs including development, maintenance, fixed, and variable), and break-even analysis (the point at which constant revenues equal ongoing costs).

·         Security is an issue for any organization offering products or services over the Internet.

·         It is inefficient for an organization to implement Internet security, since it slows down processing

v  However, to be effective it must implement Internet security

v  Secure Internet connections must offer encryption and Secure Sockets Layers (SSL denoted by the lock symbol in the lower corner of a browser) .

·         Web Site Metrics:

ü  Abandoned registrations – Number of visitors who start the process of completing a registration page and then abandon the activity.

ü  Abandoned shopping carts – Number of visitors who create a shopping cart and start shopping and then abandon the activity before paying for the merchandise.

ü  Click-through – people who visit a site, click on an ad, and are taken to the site of the advertiser.

ü  Conversion rate – potential customers who visit a site and actually buy something.

ü  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.

ü  Page exposures – average number of page exposure to an individual visitor.

ü  Total hits – number of visits to a web site, many of which may be by the same visitor.

ü  Unique visitor – number of unique visitors to a site in a given time. This is commonly used by Nielsen/Net ratings to rank the most popular Web site.

SUPPLY CHAIN MANAGEMENT METRICS

ü  Back order – an unfilled customer order.

ü  Customer order promised cycle time – the anticipated or agreed upon cycle time of a purchase order.

ü  Customer order actual cycle time – to actually fill a customer’s purchase order.

ü  Inventory replenishment cycle time – measure of the manufacturing cycle time plus  the time included to deploy the product to the appropriate distribution center.

ü  Inventory turns ( inventory turnover ) – the number of times that a company’s inventory cycles or turns over per year.

CUSTOMER RELATIONSHIP MANAGEMENT METRICS

• Customer relationship management metrics measure 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 FOR IMPLEMENTING COMPETITIVE ADVANTAGES

STRATEGIC INITIATIVES

• organizations can undertake high-profile strategic initiatives including : 

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

SUPPLY CHAIN MANAGEMENT (SCM) - involves the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability.

4 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 finished products, raw  materials, and services.
     3. Supply chain operation - schedule for production activities
     4. Supply chain logistic - product delivery process.

CUSTOMER RELATIONSHIP MANAGEMENT -  involves managing all aspects of a customer's relationship with an organization to increase customer loyalty and retention and an organization's profitability.

 

• CRM is not just technology, but a strategy, process, and business goal that an organization must embrace on an enterprise wide level.
• CRM can enable an organization to : 

             - identify types of customer
             - design individual customer marketing campaigns
             - treat each customer as an individual
             - understand customer buying behaviors


BUSINESS PROCESS REENGINEERING - the analysis and redesign of workflow within and between enterprises 

Business process - a standardized set if activities that accomplish a specific task, such as processing a customer's order.

 ENTERPRISE RESOURCE PLANNING (ERP)  -  integrates all departments and functions throughout an organization into a single IT system so that employees can make decisions by viewing enterprisewide information on all business operations.

ERP systems collect data from across an organization and correlates the data generating an enterprisewide view.

Chapter 2 : Identifying Competitive Advantage

                WHAT IS COMPETITIVE ADVANTAGE ?

·         A product or service that an organization’s customers place a greater value on than similar offerings from a competitor.

·         Competitive advantage is temporary because competitors keep duplicate the strategy. Then, the company should start the new competitive advantages.

·         Michael Porter’s find forces model is useful tool to aid organization in challenging decision whether to join a new industry or industry segment.

The Five Forces Model:

·         Buyer Power

ü  High – when buyers have many choices of whom to buy

ü  Low – when their choices are few

ü  To reduce buyer power, an organization must make it more attractive to buy from the company not from the competitors.

ü  Best practices of IT-based

Supplier Power

         High – when buyers have few choices of whom to buy from.

        Low – when their choices are many.

               Best practice of IT to create competitive advantage.

Threat of Substitute products and services

       High – when there are many alternative to a product or service.

       Low – when there are few alternative from which to choose.

       Ideally, an organization would like to be on a market in which there are few substitute of their product or services.

Threat of new entrants

       High – when it is easy for new competitors to enter a market.

      Low – when there are significant entry barriers to entering the market.

      Entering barriers is a product or service feature that customers have come to expect from organization and must be offered by entering the organization to compete and survive.

      Best practices of IT

Rivalry among existence competitors

     High – when competition is fear in a market.

     Low – when competition is more complacent.

     Best practices of IT.

            Reduce cost buy using effective supply chain.

THE THREE GENERICS STRATEGIES

1.       Cost leadership

-becoming a low cost producer in the industry allows the company to lower prices to customers.

-competitors with higher cost cannot afford to compete with the low cost leader on price

2.       Differentiation

-create competitive advantage by distinguishing their product on one or more features important to their customers.

-unique features or benefit may justify price differences or stimulate demand.

-Ex : i-care by Proton

3.       Focused strategy

-target to niche market.

-concentrates on either cost leadership or differentation

Chapter 1 : Bsness Driven Technology

INFORMATION TECHNOLOGY (IT)

  • a field concerned with the use of technology in managing and processing information.

Management Information system (MIS)
• A general name for the business function and academic discipline covering the application of people, technologies, and procedures to solve business problems.

INFORMATION

v  Data  - raw facts that describe the characteristic of an event

v  Information – data converted into a meaningful and useful context

v  Business intelligence – applications and technologies that are used to support decision-making efforts

IT CULTURES

v  Organizational information cultures include :

·         Information- Functional Cultures – Employees use information as a means of exercising influence or power over others. For example, a manager in sales refuses to share information with marketing. This causes marketing to need the sales manager’s input each time a new sales strategy is developed.

·         Information – Sharing Culture – Employees across departments trust each other to use information (especially about problems and failures) to improve performance.

·         Information-Inquiring Culture- Employees across departments search for information to better understand the future and align themselves with current trends and new directions.

·         Information- Discovery Culture- Employees across departments are open to new insights about crisis and radical changes and seek ways to create competitive advantages.