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150 Cards in this Set
- Front
- Back
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General Manager
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knowledge worker in charge of an entire organization or business unit
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Functional Manager
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knowledge worker in charge of a functional area or team
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End User
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individuals with direct contact with software applications (can also be managers)
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Importance of IS to Managers
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it is about how to use and manage IS; decisions that general and functional managers are routinely called upon to make
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Working Hypothesis
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selecting, designing, and managing IT and IS is NOT simply "IT's" responsibility; modern general and functional managers need to work in partnership with IT professionals
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Role of End Users
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come into direct contact with the technology: software and hardware; use the technology to complete their day-to-day work and improve their own productivity
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Role of General and Functional Managers
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- understand the role IT plays in an IS
- identify opportunities to use IT to their org's advantage - plan for the effective use of IS resources - manage the design, development, selection, and implementation of organizational IS's |
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The New CIO's
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- understand how to use IT to enhance business performance
- broad view of operations and business processes - understand inter-org coordination challenges and opportunities - know how the firm is positioned to execute strategy - efficiently manage IT development and operations |
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Modern CIO Requirements
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- perpetually develop the IT team/org
- effectively manage change while pursuing: marketplace innovation, process improvement, maximum agility, leverage of legacy systems - achieve 100% customer satisfaction - consistently improve business performance |
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IT Trends of Managerial Significance
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- processing power and storage capacity, continue to increase rapidly
- cost decline - easier to use; more accessible - mobility - device intelligence and processing in the "cloud" |
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Implications of IT Trends
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interconnected computing devices become more pervasive and embedded in more aspects of our lives
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Effects of Managerial Significance
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- huge increases in IT capital expenditures
- advances in communication systems - access to entertainment options - increased productivity - management relying on new intelligence tools to improve decision-making |
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Information System
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formal, socio-technical, organizational system designed to collect, process, store, and distribute information
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General System
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- set of activities, resources working toward a common goal
components: input, processing, output, feedback mechanism |
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Components of an IS
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- IT
- process - people - structure |
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Social System of an IS
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- structure
- people |
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Technical System of an IS
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- technology
- process |
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IT Component of an IS
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- hardware
- software - telecommunication equipment - the design of IT enables and constrains the behavior of the IS - software is an opinion of how information should be represented, organized, and manipulated |
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Process Component of an IS
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- the series of steps necessary to complete a business activity
- Ex: check-in at a hotel, credit approval at a bank, materials receiving at a warehouse - there are multiple ways to perform an activity: a process for the same business activity may differ across companies |
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People Component of an IS
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- those individuals or groups directly involved in the IS: end-users, managers
- their needs are a critical concern in designing and implementing a new IS |
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Structure Component of an IS
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- the org design: hierarchy, decentralized, loose coupling
- the reporting configuration: functional, divisional, matrix - the organizational relationships: communication and incentive/reward mechanisms, culture |
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Value of IS to Managers
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- a solid understanding of the characteristics of each of the four components
-- and -- - an appreciation of how they relate and interact with one another -- lead to --> - appropriate business decisions as a general or functional manager |
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Systemic Effects: Components Working Together
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- the four components of an Information System are interdependent
- changes in one component may affect all others - success is based on the proper interaction of IT with the other components |
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Purpose of IS
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- fulfilling org processing needs
- improve efficiency and effectiveness! - achieve a specified IS goal |
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IS Success
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- Has the system delivered expected results?
- What are some of the unintended results? |
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One Size Does Not Fit All
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- every org is unique
- fierce competitors often have differences: --- firm strategy --- firm culture --- IT infrastructure |
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Firm Strategy
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the manner in which the org achieves its objectives
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Firm Culture
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the collection of shared beliefs, expectations, and values
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IT Infrastructure
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technological backbone of the firm constrains and enables opportunities for future IS projects
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External Environment
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- the legal and regulatory context
- the competitive landscape - the general business and social trends surrounding the org |
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IS and Org Change
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First Order Change: Automate
Second Order Change: Informate Third Order Change: Transform |
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Automate
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- first order change
- only affects the technical subsystem - easiest to envision - easiest to justify - easiest to manage |
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Informate
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- second order change
- affects the people component - provides more of a challenge to implement |
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Transform
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- third order change
- affects org structures - seeks to transform how the org operates - requires significant managerial and executives' involvement |
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Implications
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- technology should not start the IS design process: technology may inspire strategy but technology selection is a point of arrival, not departure
- never forget systemic effects - optimize the IS as a whole, not the individual components - fit IS to org culture - re-evaluate often; change is a given |
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Efficiency
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- limit waste
- maximize the ratio of output produced to inputs consumed - "Do things right" |
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Effectiveness
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- ability to achieve stated goals or objectives
- "Do the right things" |
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Real-Time Business
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- "frictionless" business world
- elimination of: time delays, location constraints, inventory - instant gratification for a market segment of "1" - key business initiatives: just-in-time; build-to-order; mass customization; automated supply chain - driving need for Business and Systems integration |
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Categorizing Systems
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- the hierarchical perspective
- the functional perspective - the process perspective |
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Hierarchical Perspective Activities
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- strategic
- tactical - operational |
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Strategic Activity
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Time Horizon: long term
Hierarchical Level: general management; functional management Characteristics: - externally focused - ad-hoc - highly unstructured |
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Tactical Activity
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Time Horizon: mid term
Hierarchical Level: middle management Characteristics: - repeatable - semi-structured - recurrent |
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Operational Activity
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Time Horizon: short term
Hierarchical Level: front line employees Characteristics: - low discretion - highly structured - transaction focused |
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Hierarchical Perspective Levels
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Executive Level - executive IS
V Management Level - decision support systems V Operation Level - transaction processing systems |
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Functional Perspective
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systems are designed to support specific needs of individuals in the same functional area
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Process Perspective
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- series of steps that a firm performs in order to complete an economic activity
- functional and hierarchical perspectives: lack of integration across systems; results - redundancy; inefficiency - modern business processes are cross-functional - cross-functional information exchanges are weak link in the chain |
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Business Integration
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- the introduction of cohesive, streamlined business processes that encompass previously separate activities
- objective: presenting "one face" to customer; providing solutions, not just products; achieving global supply chain efficiencies |
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Systems Integration
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- tight links between IT-enabled information systems and databases
- primary focus - technology component of the IS - types of systems integration: internal; external |
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Integration Trade-Offs
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-- benefits --
- reduction of duplication and redundancy - access to information - speed - response time -- drawbacks -- - increased coordination costs - reduced local flexibility |
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Information Integration Imperative
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- goal: "real-time" business
- critical success factor: appropriate information available to anyone, anytime, anywhere - support cross-functional business processes - streamline and simplify operations |
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Tools for Enabling Integration
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- business process reengineering
- "IS cycle": generalting and analyzing data - enterprise systems |
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Business Process Reeingineering (BPR)
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- seeks to break down the functional/organizational silos
- fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical performance measures: cost, quality, service, and speed - envisioning new work strategies, and designing process activities to support the strategies - managing the technical, human, and org change required to implement the new strategies |
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BPR Risks
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- requires radival 3rd order change: transform; affects all 4 elements of IS
- significant downsizing and layoffs - very expensive to implement - business process management (BPM) = kinder, gentler to follow-on to BPR |
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The IS Cycle
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- data created
- data organized and stored - data analyzed - analysis results |
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Data Created
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transaction processing systems
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Data Organized and Stored
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data repositories
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Data Analyzed
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analytical tools
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Analysis Results
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used to guide BPR and process improvement
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Enterprise Systems
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- class of standardized software application that support integrated business processes
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Enterprise System Characteristics
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- modular
- integrated - span all organization functions - rely on one database at the core - custom developed or off-the-shelf purchase |
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Enterprise System Advantages
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-- efficiency --
- reduce dependency on legacy IT infrastructures - eliminate redundant data - stream-line operations -- effectiveness -- - more responsive to customer and market demands - measurable evaluation of programs and campaigns |
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Enterprise System Limitations
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- adaptable during the implementation process (configuration choices)
- difficult to change once configured - requires strict adherence to rules and processes - performance and quality may not be uniform across modules |
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Enterprise System Module: Supply Chain Management
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- supply chain: set of coordinated entities that contribute to move a product or service through production to consumption
- upstream supply chain - downstream supply chain |
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Modern Supply Chain Management
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- tight linkages between upstream suppliers and downstream distributors, retailers, customers
- supply chain entities "linked" together via physical flows and information flows - integration with other enterprise system modules |
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Physical Flows
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transformation, movement, and storage of goods and materials
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Information Flows
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- coordination of long-term plans
- control day-to-day flow of materials throughout the supply chain |
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Supply Chain Management Trends: RFID Tags
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- no line of sight requirements
- embedding potential - read / write capabilities - storage capacity - speed up the receiving process - improve monitoring and control of inventories |
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Enterprise Application Integration (EAI)
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- middleware: intermediate layer SW; hub between SW applications and databases
- streamlines maintenance & modifications to applications and databases: changes to one program will not impact others; only change is interface to middleware - enables integration of “Best-of-Breed” components |
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Knowledge
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- data
- information - knowledge |
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Data
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codified raw facts
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Information
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data in context
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Knowledge
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- blend of actionable information
- built over time - based upon accumulated experiences and understanding |
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Categories of Knowledge
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-- explicit knowledge --
- can be articulated - codified - transferred with relative case -- tacit knowledge -- - knowledge that individuals possess, but find difficult to articulate and document |
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Knowledge Management
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- set of activities and processes to manage knowledge: create, capture, codify, store, and disseminate
- IT is a key component and enabler |
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Business Intelligence
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- the ability to gather and make sense of information in a given area of interest: set of techniques; processes; technologies
- purpose: gain superior insight and understanding of the business and its environment; make better decisions |
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Intelligence
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ability to understand the interrelationships of presented facts in such a way as to guide action towards a desired goal
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Business Intelligence Components
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- data warehouse
- data and text mining - online analytical processing (OLAP) - business performance management dashboard - benchmarking - predictive analytics |
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Data Warehouse
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- consolidates and integrates multiple data sources
- large size and scope - designed for analytics |
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Data and Text Mining
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- automatic search for non-obvious relationships in large databases ,web and documents
- pattern recognition methodology |
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Online Analytical Processing (OLAP)
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- software that extracts and views data from different perspectives (drill down, roll up)
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Enterprise System Module: Customer Relationship Management
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- CRM is a strategic initiative, not a technology
- definition: set of iterative processes designed to turn data into managed customer relationships - uses data analysis to make inferences and predictions about: customer behavior; customer needs; marketing effectiveness - designed to create value for the firm by optimizing the relationship with each customer |
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Types of Networks
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- physical networks
- virtual networks |
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Physical Networks
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the nodes of the network are connected by physical links: telephone network, railroad network
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Virtual Network
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- the connections between network nodes are intangible and invisible, such as people: iTunes network, Skype network, eBay network
- generally sponsored by an org or technology that enables it, controls access to it, and manages its evolution - value: shared information; shared expertise; direct function of size (number of nodes) |
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Network Economics: How is value created in networks?
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- value in scarcity
- value in plentitude |
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Value in Scarcity
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the value of a traditional good is a function of its limited availability
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Value in Plentitude
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the value of a network is a function of the number of connected nodes
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Positive Feedback
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- self-reinforcing trend: "strong get stronger"; "weak get weaker"
- economies-of-scale: unit costs decline with increasing volume of production |
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Negative Feedback
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- dampening trend: "strong get weaker"; "weak get stronger"
- normal supply and demand equilibrium - thermostat |
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Network Effects
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- value in Scarcity implies negative feedback dynamic = equilibrium
- value in plentitude implies positive feedback dynamic = network effect - new network node creates value for all other members of the network: by-product of individual decision - larger the network, more valuable it is: more participants and more transactions |
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Network Effects Implications
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- lead to "winner-take-all" for dominant firm
-- strategy for non-dominant firms -- - become compatible with the dominant player - find a niche that is different enough from the broader market and big enough to sustain the firm |
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Tipping Point
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- point of discontinuity where system undergoes fundamental change
- moment in market evolution when one organization or technology reaches critical mass - point of no return - winners and losers are defined |
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Tippy Market
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- subject to strong positive feedback
- “tips” in favor of firm that first reaches critical mass - winner-take-all outcomes |
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Factors Influencing Tippy Markets
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- positive feedback factors create Tippy Markets: economies of scale in production; the presence and strength of “network effects”
- negative feedback factors weaken Tippy Markets: customer demand for variety - enables distinct market niches |
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Network Economies Summary
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- network types: physical, virtual
- network effects: value-in-plentitude; positive feedback (reinforcing trend); winner-take-all for donomiant firm - tippy market (tipping point = critical mass): (+) economies of scale and network effects; (-) demand for variety; first-mover advantages is critical |
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Data
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codified raw facts:
- things that have happened - coded as letters of the alphabet and numbers - increasingly stored digitally |
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Information
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data in context:
- audience-dependent |
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Classic "Information" Goods
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- products purchased for the sole purpose of gaiing access to embedded information
- products that can be digitized |
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Information Good Economics
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- high fixed production costs: significant risks
- negligible replication costs - negligible distribution cost - information often bundled with physical carrier: economics of physical carrier dominates - no natural capacity limits - not consumed by use - experience required to assess value and quality |
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Information Good characteristics
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- customizable
- reusable - often time-valued - significant gross profit margins |
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Information-Intensive Goods
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- most products and services are information intensive
- information plays a critical role in: creating the product/service; bringing it to market - information may be: at the periphery of the product/service; embedded in the product itself as knowledge |
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Information in Networks
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- physical carriers of information goods often prevent information goods from behaving like information goods: economics of non-information carrier dominates
- distribution through networks (eliminating physical carrier) restores information good attributes |
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Richness
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- the amount of information that can be transmitted
- the degree to which the information can be tailored to individual needs - the level of interactivity of the message |
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Reach
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the number of possible recipients of the message
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The Richness and Reach Trade-Off
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- the Internet and associated technologies have mitigated the trade-off
- higher levels of both available - trade-off has not been eliminated |
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New Business Models
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traditional models based upon bundling information with a physical carrier
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Modify Product Bundle
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- unbundle traditional products
- bundle new combinations of products |
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Decreasing Value of Asymmetric Information
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traditional value proposition based upon the inability of individuals to obtain relevant information at low costs
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Sustaining Technology
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- maintains the current rate of performance improvement of the products and services that use them
- facilities replacement of previous generation: same set of attributes; improved performance |
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Disruptive Technology
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- initially not as good on current performance attributes
- also has different set of attributes than the current technology - rate of performance improvement for current attributes is higher than the market demands |
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Disruptive Technology Assessment
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- disruptive technology must meet market needs on critical current performance dimensions within reasonable time period
- novel attributes of the disruptive technology may become a source of positive differentiation - only the most aggressive customers will adopt: bias toward prompt adoption of sustaining technology; established firms reluctant to invest in disruptive technology - most disruptive innovations come from outside the established industry |
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The Internet: Definition
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a networks of networks, connecting many private, business, academic, and govt computers worldwide into an infrastructure upon which many services are delivered
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The Internet: Characteristics
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- distributed ownership
- multitude of devices - open standards - cheap/free access |
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Distributed Ownership
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different portions owned by different entities
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Multitude of Devices
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millions of smaller digital networks linking wide-range of intelligent devices (nodes)
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Open Standards
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agreed upon set of rules or conventions governing communication among Internet nodes - embodied in the "Browser"
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Cheap/Free Access
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- browser = free
- unlimited Internet access < $50/mo |
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Internet Policy Issue
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- principle: no restriction by ISPs or government entities on consumer access to the Internet: no restrictions on content, sites, types of equipment attached, modes of communication
- proponents: feat the service providers will use access control to block content and competitors - opponents: want restriction and data discrimination to guarantee "quality of service" |
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eCommerce
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- online exchange of value
- the process of distributing, buying, selling, marketing, and servicing products and services over computer networks such as the Internet |
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eBusiness
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the use of the Internet technologies and other advanced IT to enable and support business processes and operations
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The Enablers
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- affordable computing equipment
- access to the Internet - ease of use - open standards |
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Categorizing Ventures by Transaction Type
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- B2C
- B2B - C2C - C2B - eGovernment |
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Categorizing Ventures by Company Structure
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- bricks and mortar
- bricks and clicks - pure play |
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Business-to-Consumer (B2C)
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- involve a for-profit org on one side and the end-consumer on the other
- the most visible kind of eCommerce |
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Business-to-Business (B2B)
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- two or more business entities take part in the transaction
- the transactions can range from one-time interactions to unique and highly tailored relationship between two firms |
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Consumer-to-Consumer (C2C)
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enable individual consumers to interact and transact directly
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Consumer-to-Business
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individuals transact with business organizations not as buyers of goods and services, but as suppliers
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eGovernment
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- transactions involving legislation and administrative institutions
- can occur with individual citizens, business, or other governments |
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Bricks and Mortar
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"traditional" organizations that have physical operations and locations and don't provide their services exclusively through the Internet
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Bricks and Clicks
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- organizations that have hybrid operations
-- two approaches -- 1. developing independent ventures to take advantage of the opportunities, and capital available to online ventures 2. running the online channel as part of the bricks and mortar operations in a highly integrated fashion |
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Pure Play
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- firms with no physical stores: could have physical back-end operations
- providing services exclusively through the internet |
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Business Models
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- captures firm's concept and value proposition
- conveys: the market opportunity; what product or service the firm offers; what strategy the firm will follow to seek a dominant position - identifies organizational capabilities the firm plans to leverage to turn the concept into reality - the network economy creates opportunities for new business models |
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Revenue Model
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- a component of the business model
- pay for service - subscription - advertising support - referral/affiliate - freemium |
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Dominant Business Models
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- online retailing
- infomediaries - content providers - online communities - exchanges - infrastructure providers |
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Online Retailing
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- takes control (not necessarily deliveery) of inventory it then resells at a profit
- fulfillment is a critical capability for these organizations - revenue model: pay-for-service |
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Infomediaries (Information Intermediaries)
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- use the Internet to provide specialized information on behalf of product or service providers
- do not sell the goods and services or take ownership of inventory |
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Content Providers
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- develop and publish content
- sources of content: owned; not owned - revenue model: ad supported, subscription, pay per download |
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Online Communities
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- a group of people brought together by a common interest or goal
- the community is virtual and alleviates the physical constraint |
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Exchanges
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- create a market-place for buyers and sellers to come together and transact
- provides "market-making" - compensated with fees, commission on sales, or consulting fees |
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Infrastructure Providers
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- companies that have been able to create value by developing and managing the infrastructure of electronic commerce
- revenue model: pay-for-service |
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eCommerce Implications
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- disintermediation
- re-intermediation - market efficiency - channel conflict - customer and employee self-service |
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Disintermediation
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shortening the supply chain by eliminating intermediaries and establishing direct relationship with customers
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Re-Intermediation
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creating opportunities for new intermediaries to exist alongside their brick and mortar counterparts
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Market Efficiency
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reducing search costs increase difficulty in profiting from strategies rooted in asymmetry of information or high search costs
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Channel Conflict
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online channels can be in conflict with traditional physical (retail channels)
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Web 2.0: Defining Characteristics
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emergent structure; interactive (collective) participation
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Web 2.0: Wiki
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collective authoring and editing of Web content
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Web 2.0: Blog
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online journal that individuals publish on the Web
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Web 2.0: RSS
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- "Real Simple Syndication"
- enables the creation of web feeds - broadcast to all subscribers once a trigger event occurs |
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Web 2.0: Tags
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used to structure and categorize large quantity of available user-generated content
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