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97 Cards in this Set

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Business model
buzzword of the internet boom, routinely invoked to "glorify all manner of half-baked plans"; essentially, it defines how an enterprise interacts with its environment to define a unique strategy, attract the resources and build the capabilities to execute it, an, in the process, create value for all stakeholders. A successful business model aligns an organization with its environment.
Value chain/value network
a type of strategic positioning that determines the role an organization play sand the activities it performs within an extended network of suppliers, producers, distributors and partners.
Sustainable advantage
occurs when barriers exist that make it difficult for competitors to imitate and/or customers to switch.
Competitor analysis
analysis of traditional rivals, potential new entrants, and substitute products and services. (Michael Porter's Five Forces Industry Analysis is a frequently used framework to analyze traditional rivalry, bargaining power, and competitive intensity.)
How you develop a unique product/market position:
- Choose markets to serve, product/service offerings, and channels to reach markets
- Decide which markets, products, channels and businesses you will NOT pursue
- Identify basis for differentiation
- Define messages to develop and communicate brand

see. Figure 1.3 (book p. 30)
--> the market is changing to provide solutions rather than targeted offerings
Business context
Political, societal, regulatory, legal and economic factors that affect (or could affect) a business today and in the future. (This is the final category of analysis in a strategic audit.) In analyzing the business context, it is important to, not just take a static snapshot, but also to look both backward and forward, assessing relative stability and the sources of instability and turbulence.
Strategic enhancements
incremental changes to an existing product, market, channel or value network (for example, an existing product can be improved to make it easier to use or to add new functionality)
Strategic expansions
Involve the launch of new products or product categories, entry into new markets, or the launch of a new channel (e.g., an online channel to market) to complement existing channels.
Strategic extensions
Involve the launch of a new business or business model
Strategic exits
Involve decisions to drop a product or product category, exit a market, and/or close a channel or business.
Entry barrier
Companies erect entry barriers by offering customers and other market participants attractive products and services at a price and level of quality that competitors cannot match. (The Internet's low cost and ease of penetration decrease the benefits to any one participant unless people within the firm are able to:
- learn and respond more quickly and more effectively than others
- build proprietary capabilities that are not easily replicable
- create a large, loyal community that remains committed and engaged despite the availability of seemingly comparable alternatives)
Switching cost
To provide a sustainable source of revenues, an IT system should ideally be easy to start using but difficult to stop using. Customers drawn into the system through a series of increasingly valuable enhancements should willingly become dependent on the system's functionality. Once use of the system becomes ingrained w/in day-to-day activities, switching to another system becomes difficult and costly.
Disruptive technology
key features of disruptive technology include:
- the technology evolves significantly faster than the evolutionary path of the dominant technology in the industry
- the technology enables new products, services, pricing or business models that change the basis of competition in ways that are difficult for established players to match
- the emergence of technology coincides with regulatory changes or significant customer dissatisfaction with the status quo that dramatically influence the competitive power of established players to respond.
Collaborative governance
an alternative model within which traditional suppliers, buyers and channel players develop a neutral, third-party channel upon which all transactions and information can flow. The need for clear delineation of how ownership and control of infrastructure, applications, and information is apportioned among members of the extended supply chain and the design of a collaborative governance structure provides an excellent example of alternatives to government regulation.
Ecosystem
a diffuse and fluid business network (as opposed to a "hierarchy")
On Demand enterprise
an enterprise that "unites information, processes, and people to create an enterprise in which end-to-end processes are integrated across a company, an industry, and globally to enable it to respond with speed and flexibility to any customer demand, market opportunity, or external threat."
Hierarchical control system
designed to ensure tight control of operating processes through multiple intersecting checks and balances. At lower levels, control systems are based on action controls (employees are told exactly what they are supposed to do and supervisors watch to see that they do it). As one moves up in the hierarchy, managers are evaluated and compensated based on their ability to meet predefined performance criteria; these results controls help focus managerial attention and actions on organizational priorities and ensure coordination of actions and decisions across functional boundaries. Personnel controls ensure that the right people with the right skills are recruited, hired, developed, motivated and retained. Finally, transaction controls - accurate and complete documentation of financial and legal transactions with regular review by senior executives, the board of directors, and external auditors - ensure risk and asset management.
End-to-end process (or operation) (pp. 64-66)
Everything involved in operations (i.e., supply chain, manufacturing, order fulfillment processes, etc.); the relevance is that an executive must consider every operation in the end-to-end process when making decisions that will change portions of at least one operation.
Operating process (p. 66)
The activities through which an organization designs, produces, markets, delivers and supports its products or services.
Management process (p. 66)
The activities through which an organization manages the design, production, marketing, delivery, and support of its products or services
Compliance model of control (p. 66)
The model of control used in a traditional hierarchy; it focuses on standardization of jobs and direct supervision
Learning model of control (p. 66)
The emerging model of control; as opposed to compliance, this model preserves flexibility and fosters commitment. It is emerging because of the more fast-cycled, more complex requirements of today's global network economy. Systems thinking (the ability to see a situation or problem in its totality) is at the heart of learning. It demands an understanding of the casual relationships b/w individual components of a system and the whole; this understanding of casual relationships must then be linked to the performance of the system in accomplishing goals. A learning model is founded on a deep understanding of core operating processes.
Systems thinking (p. 66)
the ability to see a situation or problem in its totality
Stretch target (p. 71)
performance goals that exceed the level of output that can be predicted based on historical data. At the organizational level, stretch targets help intensify effort, clarify priorities, focus attention, and support a commitment to collaborate among independent divisions.
Transaction cost theory (pp. 88-89)
focuses on transactions among discrete nodes on a network as the basic unit of analysis and the associated costs and risks of these transactions; it argues that market forms of governance lead to greater efficiency and effectiveness unless the cost and risk of using market mechanisms to coordinate and control interdependencies are higher than the cost and risk of hierarchy. Conditions that increase the cost and risk associated w/ market forms of governance include the (1) need to duplicate costly, proprietary assets that cannot be easily leveraged and shared across organizational boundaries; (2) need to settle frequent disputes among parties in a transaction; (3) increased cost and effort related to access and validation of information concerning transactions and price; and (4) need to join with others to increase market power.
Collaborative community (p. 90)
The emerging governance model (whether used to control intra- or inter-firm relationships). Key features are:

- shared purpose and values stress an ethic of contribution that replaces the uneasy coexistence of loyalty and individualism in tradition intra- and inter-firm business networks
- organizational configurations and solutions support horizontal relationships among peers, yet, as wee see below, these peer-to-peer horizontal relationships do not preclude the existence of interdependent vertical, authority-based relationships and market-based transactions
- development of an interdependent form of identity that motivates and engages active participation and affiliation over time
Virtual corporation (p. 96)
a network of focused businesses that would come together as free agents to design, build, market, sell and support products and services w/in a wide variety of old and new economy industries
eRetailer (p. 101)
retailers that assume control of inventory, set a nonnegotiable price to the consumer, and sell physical products online. (Therefore, the primary revenue model is based on product/service sales and the cost model includes procurement, inventory management, order fulfillment, and customer service (including returns).)

Example: Amazon
eMarket (p. 102)
Link buyers and sellers allowing them to compare and purchase products online. Unlike eRetailers, eMarketers do not take control of physical inventory. As a result, the revenue model includes a commission or transaction fee on each sale. Because sales transactions take place online, eMarkets must electronically link to supplier databases and order fulfillment systems to ensure that transactions can be completed and revenue recognized.

Example: GHX
eAggregator (p. 102)
Provide information on products or services for sale by others in the channel. Companeis adopting this model often provide electronic catalogs and comparisons of features and pricing - but do not enable the customer to complete the final sale transaction. Instead, they pass the customer through to the supplier to complete the sale. The revenue model for these sites is often based on referral fees and advertising. Because the transaction is not completed online, some aggregators find that consumers use the site to comparison shop then go offline to make the purchase. As a result, aggregators often lose referral fees and must depend heavily on advertising and other supplemental revenue sources.

Example: InsWeb
Infomediary (p. 102)
a special class of eAggregator that unites sellers and buyers of information. Because no physical product is involved, the transaction can be completed online. Infomediaries - especially those that cater to business professionals - may charge individual users a subscription fee for the service.

Example: Internet Securities (I think the OED would also fall somewhat under the infomediary description as it is a subscription service)
Exchange (p. 103)
i.e., NASDAQ, eBay, FreeMarkets

May or may not take control of inventory - the tendency is to try and avoid assuming inventory carrying costs whenever feasible - and may or may not complete the final sales transaction online. Key differentiating feature: the price is not set; it is negotiated by the buyer and seller at the time of the sale. The revenue, cost, and asset models vary depending on whether the online exchange assumes control of inventory and completes the transaction and the level of human facilitation required.
Portal (p. 103)
Today, it's known as a channel through which users can access information and services provided within a focused area (vertical channels) or across a wide range of content, similar to the broadcasting channels on television or radio channels.
Infrastructure portal (p. 105)
Firms that provide consumers and/or businesses with access to a wide range of network, computing, and application hosting services.
Internet service providers (ISPs) (p. 105)
Provide gateway access to a wide range of network (cable, voice, Internet), data center, and Web site/online business hosting services. The revenue model includes access and maintenance fees, subscription services, and, at times, transaction fees. (can also generate ad revenues) Key costs include data and network center operations, software development and maintenance, system integration consulting and software development, marketing, sales, and administration.
Application service providers (ASPs) (p. 105)
Digital infrastructure vertical portals are often referred to as ASPs. Rather than sell software apps, an ASP hosts and maintains a software app, enabling businesses and individuals to log in and conduct business online. Examples of ASP vertical portals include Salesforce.com, IBM's BUsiness Transformation Outsourcing and Oracle On Demand.

Revenues: hosting and maintenance fees, consulting fees, and system integration fees.

Costs: similar to those incurred by horizontal portals
Scarce resource (p. 115)
something that your firm can do or has access to which others do not.
Commodity (p. 115)
In Carr's argument, IT should be considered a commodity - part of the infrastructure upon which a firm does business - because it no longer confers proprietary advantage.
Business On Demand (p. 117)
Flexible, open standard and ubiquitous IT infrastructures designed to be shared (and actually become more valuable when shared). This breed has dramatically increased the range of business building opportunities that can be pursued while also dramatically decreasing the cost and time required to launch new IT-enabled strategic initiatives. Allows execs to exploit the immediate cost savings and asset productivity that come from sharing a common infrastructure while also exploiting the dramatic increase in "strategic options" for pursuing opportunities that drive profitable growth and proprietary advantage.
Offshoring IT (p. 122)
Building shared services IT infrastructure in company locations in offshore locations where they can take advantage of lower cost, yet highly skilled, labor markets (i.e., India, China, Brazil)
Information technology (IT) infrastructure (p. 279)
The entire layered fabric of hardware, software, systems, and media that collectively deliver IT services
Moore's law (p. 281)
The performance of memory chips will double every 18 to 24 months, whereas their size and cost will remain roughly constant. (stated in 1965 by Gordon Moore)
Transmission Control Protocol and Internet Protocol (TCP/IP) (p. 283)
the protocol (rules for how data would be moved across networks) that provided a robust standard for routing messages between LANs and created the potential to connect all computers on an ever-larger wide area network (WAN). Is an open standard (not owned by any person or company).
Metcalfe's law (p. 283)
The usefulness of a network increases with the square of the number of users connected to the network. (commonly attributed to Robert Metcalfe, one of the inventors of the ethernet standard)
Routers (p. 287)
devices that enable internetworking, the means by which messages are relayed across large distances. A router listens in on LAN conversations and recognizes messages intended for computers that are not on that LAN. The listening router relays those messages to other routers. Each router has some notion of the approximate direction of the message's destination across the larger network.
Client devices (p. 289)
PCs, handheld devices, cell phones, and even automotive components
Client systems (p. 289)
the software that runs on client devices to perform business functions, manage interactions with other computers, and handle certain low-level client machine operations (such as storing saved information).
Middleware (p. 291)
the hodgepodge of enabling utilities, message handling adn queuing systems, protocols, standards, software tool kits, and other systems that help clients, servers, mainframes, and their systems coordinate activities in time and across networks. Middleware, which often runs on servers, could be considered a category of server system, but it is important enough in orchestrating the activities of internetworking infrastructure to deserve separate mention.
Redundancy (p. 305)
The exceptionally large number of potential paths a message can take between any two points in a network. (the key to reliability)
"Five nines" (p. 307)
means 99.999 percent availability, which equates to less than a second of downtime in a 24-hour day, or no more than a minute in three months, on average. Not surprisingly, keeping systems available at such a high level requires much redundancy and highly sophisticated operations management.
Internet backbone providers (p. 311)
own the very large data transmission lines through which large quantities of data are moved long distances
"N + 1" redundancy (p. 312)
for each type of critical component there should be at least one unit standing by. For example, if a facility needs four diesel generators to meet power demands in a primary power outage, N + 1 redundancy requires five such generators, four to operate and one to stand by. N + 1 provides a higher level of availability if the underlying number of components, the N in the N + 1, is small
"N + N" redundancy (p. 312)
requires twice as many mission-critical components as are necessary to run a facility at any one time. For example, a facility that needs four diesel generators to meet its power demands needs eight generators to achieve N + N redundancy.
Redundant array of inexpensive disks (RAID) (p. 313)
a technology that supports the integrated use of two or more hard-drives in various configurations for the purposes of achieving greater performance, reliability through redundancy, and larger disk volume sizes through aggregation
Denial of service (DoS) attacks (p. 315)
the most common external attacks, which disable infrastructure devices (usually Web servers) by flooding them with an overwhelming number of messages. Attackers send data packets far more rapidly than the target machine can handle them. Each packet begins what appears to be an authentic "conversation" with the victim computer. The victim responds as it usually does to the beginning of a conversation, but the attacker abruptly terminates the conversation. The resources of the Web site are consumed by beginning a very large number of bogus conversations.
Distributed denial of service (DDoS) attacks (p. 316-317)
a DoS attack carried out by automated routines secretly deposited on Internet-connected computers whose owners have not secured them against intrusion (a large percentage of DSL and cable modem-connected PCs fall into theis unsecured category). Once implanted ont eh computers of unsuspecting users, these routines launch packets at targeted Web sites for a predefined duration or during a predetermined interval. Because the flood comes from many different addresses, network-monitoring software cannot easily recognize the flood as an attack. Clever attackers can simulate a distributed attack by inserting false origin information into packets to mislead filtering software at a target site (providing packets with false origin addresses is called "spoofing")
Spoofing (p. 317)
Providing packets with false origin addresses (as in a DDoS attack)
Host authentication (p. 322)
Authentication describes the variety of techniques and software used to control who accesses elements of computing infrastructure. Host authentication controls access to specific computers (hosts); used in combination with network authentication.
Network authentication (p. 322)
Controls access to regions of a network.
Virtual private network (VPN) (p. 324)
use encryption to create a connection across public networks that extend a company's private network. Traffic b/w two points - for exmaple, a remote user and a computer inside a company's network - is encrypted at one end of the transmission, encapsulated inside new packets, and sent on to a destination where the packets are unencapsulated and decrypted. VPNs allow a secure private network to be extended securely across a public network to arbitrary points. There is a dark side to this, however. If an attacker can gain access to a remote VPN node, a company's network can be attacked as if from the inside. Thus, although VPNs extend security usefully, they also add to the complexity of the security mangement task.
Hosting company (p. 340)
companies that own and manage the facilities that house computers that provide over-the-Net services. In online retailing, for example, back-office functions (shopping cart, checkout, and credit card processing, for example) that enable Web-based consumer purchases often reside on computing platforms in hosting facilities rather than on the selling company's premises or local to the consumer.
Request for proposal (RFP) (p. 343)
asks prospective providers for information relevant to their service capabilities across a spectrum that includes financial, technical and operational information. Responses become a primary basis for deciding b/w vendors.
Service-level agreement (SLA) (pp. 347-348)
Aligns incentives in relationships with service providers. SLAs describe the specific conditions by which the service provider is held liable for a service interruption and the penalties that the service provider will incur as a result
Enterprise application integration (EAI) (p. 350)
Many businesses have succeeded in adding interfaces to legacy systems that enable them to work with internetworking systems. This interfacing approach sometimes is called enterprise application integration (EAI). EAI practitioners recommend "non-invasive" interfaces that minimize changes to the internal operations of legacy systems. Even EAI enthusiasts, however, acknowledge limits to how well legacy systems can perform as components of real-time infrastructure.
Total cost of ownership (TCO) (p. 351)
Analysis in which IT serves are analyzed in terms of the costs and benefits associated with service delivery to each client device. For example, the total cost of delivering office productivity services to a PC desktop within an enterprise might be expressed as "$250 per client per month." Arriving at this number requires a detailed study to determine the total monthly costs associated with the delivery of each service available on that client, including costs shared with other clients and costs not necessarily accounted for as line items in budgets or accounting systems.
Virtual integration (p. 384)
Coordination across company boundaries to achieve new levels of efficiency and productivity, as well as extraordinary returns to investors. Virtual integration harnesses the economic benefits of two very different business models. It offers the advantages of a tightly coordinated supply chain that have traditionally come through vertical integration. At the same time, it benefits from the focus and specialization that drive virtual corporations.
"Scalable" businesses (p. 388)
businesses in which revenues can be grown faster than expenses
Velocity (p. 394)
speeding the pace of every element of a business (a Dell Computer term). Managing velocity is about managing information - using a constant flow of information to drive operating practices, form performance measures to working with suppliers.
CAD (p. 421)
Computer-aided design
Point-of-sale (POS) (p. 422)
an inventory tracking system; used to accumulate daily sales totals, trigger reorders, etc.
Business Process Outsourcing (BPO) (pp. 577-578)
Makes it so that business proceses are no longer constrained by physical, geographic, or organizational bounds when IT can tie these processes together. BPO became possible because of key advances in information technology (IT). The digital foundation of a globally connected knowledge economy was formed by standardization and commercialization of the Internet, the rapid evolution of World Wide Web technologies including XML for data interoperability, along with an unprecedented build-out of communications bandwidth
Insourcing (p. 578)
Attracting foreign companies to establish operations based in the United States
Onshoring (p. 578)
When global companies establish corporate offices outside of their own country, with the objective of putting in place a globally distributed value chain where work can be done anywhere int he world based upon relative advantage and efficiency
Outsourcing (p. 578)
Contracting independent third parties to agreed-upon and execute well-defined business processes. The third parties may be in the same city, state, or country or they may be abroad in a country with a lower wage or where a more appropriate business structure exists.
Computer service bureau (p. 439)
In the mid-1960s, computer services bureaus ran a variety of programs whose applications focused heavily on the financial and operations support areas (general ledger, payroll, inventory control, and so on). The programs were both customized and general-purpose, and the individual firm had to accomodate its operations to the standard options in the package. Service bureau customers were mostly small nad medium-size firms, although some large firms used them for specialized needs or highly confidential items such as executive payroll. (Today this has evolved into outsourcing)
Implementation risk (p. 454)
risk influenced by project size, experience with the technology, and requirements volatility.
Requirements volatility (p. 454)
For some projects the nature of the task fully and clearly defines project outputs. From the project's beginning throughout its duration, outputs remain fixed. Inherent stable requirements make these projects easier to manage. Other projects do not have such convenient characteristics. Requirements for tehse projects are volatile, difficult to determine, and they tend to evolve throughout the project.
Portfolio risk (pp. 459-460)
In addition to determining relative risk for single projects, a company should develop a profile of aggregate implementation risk for its portfolio of systems projects. Different portfolio risk profiles are appropriate to different companies and strategies.
Program evaluation and review technique (PERT) (p. 463)
a model for project management designed to analyze and represent the tasks involved in completing a given project.
Critical path method (CPM) (p. 463)
a mathematically based algorithm for scheduling a set of project activities. It is a very important tool for effective project management.
Adaptive methods (p. 466)
approaches to design, deployment, implementation and investment that assume a need to gather information and to learn as one goes. To be used successfully, adaptive methods require that project staff be able to experiment during a project w/o incurring prohibitively high costs.
System development life cycle (SDLC) (pp. 466-467)
1. analysis and design
2. construction
3. implementation
4. operation and maintenance
Alpha testing (p. 467)
testing the system in the laboratory
Beta testing (p. 467)
testing the system in the real-world user environment
Flat files (11.3)
System in which each invidivual record contained both customer and transaction information; part of the mainframe era (replaced w/ the database)
Data mart (11.4-11.5)
A data mart is an assembly of information on a particularly focused area, which is usually extracted from a large data warehouse. Think of a book warehouse. The warehouse stores books on many topics from many publishers. Suppose a bookseller deals only in books in the area of medicine. The warehouse supplies him or her w/ books on his or her focused area. The bookseller is a mart that relies on the warehouse.
Data mining (11.5)
Sifting through data to find valuable nuggets of information. Data mining uses a series of statistical methods to identify patterns and discover relationships w/in the data. Data mining methods identify associations connecting events, seek cause-and-effect patterns, and project future events based on data patterns
Online analytical processing (OLAP) (11.5)
FASMI - Fast Analysis of Shared Multidimensional Information

FAST - system is targeted to deliver most responses to users w/in about 5 seconds, w/ the simplest analyses taking no more than one second and very few taking more than 20 seconds.

ANALYSIS - the system can cope w/ any business logic and statistical analysis that is relevant for the application and the user, and easy enough for the target user

SHARED - system implements all the security requirements for confidentiality (possibly down to cell level) and, if multiple write access is needed, concurrent update locking at an appropriate level

MULTIDIMENSIONAL - must provide a multidimensional conceptual view of teh data, including full support for hierarchies and multiple hierarchies, as this is certainly the most logical way to analyze businesses and organizations

INFORMATION - it has all of the data and derived information needed, wherever it is and however much is relevant for the application.
Relational online analytical processing (ROLAP) (11.6)
Relational OLAP. As noted in the OLAP definition, a key requirement of OLAP is that it must provide a multidimensional view of the data. This is accomplished w/ multidimensional data structures that are more advanced than an ordinary relational database. Think of ROLAP as "Olap Lite." Technicians do not always agree about what version of OLAP (OLAP, ROLAP, or other nuances) is best suited for any given application)
Knowledge discovery (11.10-11.11)
a process that attempts to discover characteristics, relationships, and patterns that have not been intuitively grasped by a business analyst. Steps include:

1. Makes rue the data is well prepared, use as much detailed data as possible, and let the domain experts loose to choose the right data so that the correct knowledge content is available.
2. Select the right tools by understanding the potential users, the structure of your data, and the likely job requirements.
3. Use the domain knowledge of your business analyst to point the tools at the right data.
4. Once the information comes back, let the business analyst help explain and redirect efforts.
Visualization (11.12)
This process takes large amounts of data and reduces them into more easily interpreted pictures. Instead of voluminous sets of numbers, colored pictures tell the story with clarity. Different colors, textures, and relief are used in combination with various levels of dimensionality, and in some instance, animation. If, however, you have more than four variables, some believe it is not easily read.
Clustering (11.12)
Is an approach where you identify distinguishing characteristics b/w sets of records, and then place them into groups or segments. This process is often the stepping-off point for data mining as it leads to further relationship exploration. This particular process is an obvious candidate for customer segmentation as you are clustering by similarities.
Association (11.12)
Here you find rules that enable you to correlate the presence of one set of items w/ another set of items. This method has been found to be effective in Market Basket Analysis, more often termed Product Affinity in Insurance and Financial Services, where you find that certain items are always bought at the same time. If you can find the natural buying patterns of a customer you can use the patterns to help market your product. The output of this association is a list of product affinities.
Sequential association (11.12)
Patterns emerge over time and this method looks for links that relate these sequential patterns. The idea is to use associative data such as account value history or life events to tie together a sequence of events in a time series. Life-triggers that precede specific purchases and precursor purchases are often found using this methodology.
Distillation/summarization (11.12)
The search for patterns can be further extended by reducing large amounts of data to meaningful summaries by use of rules.
Customer lifetime value (11.21)
Takes into account all the factors that have a bearing on the customer's value over the entire course of his/her relationship with the insurance company.
Affinity analysis (11.21)
Often referred to as market-basket analysis. Certain products show an affinity towards each other, and are likely to be bought together. For example, a man in his early thirties who buys a life insurance policy might also be interested in a certain type of annuity.