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150 Cards in this Set

  • Front
  • Back
General Manager
knowledge worker in charge of an entire organization or business unit
Functional Manager
knowledge worker in charge of a functional area or team
End User
individuals with direct contact with software applications (can also be managers)
Importance of IS to Managers
it is about how to use and manage IS; decisions that general and functional managers are routinely called upon to make
Working Hypothesis
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
Role of End Users
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
Role of General and Functional Managers
- 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
The New CIO's
- 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
Modern CIO Requirements
- 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
IT Trends of Managerial Significance
- processing power and storage capacity, continue to increase rapidly
- cost decline
- easier to use; more accessible
- mobility
- device intelligence and processing in the "cloud"
Implications of IT Trends
interconnected computing devices become more pervasive and embedded in more aspects of our lives
Effects of Managerial Significance
- 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
Information System
formal, socio-technical, organizational system designed to collect, process, store, and distribute information
General System
- set of activities, resources working toward a common goal
components: input, processing, output, feedback mechanism
Components of an IS
- IT
- process
- people
- structure
Social System of an IS
- structure
- people
Technical System of an IS
- technology
- process
IT Component of an IS
- 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
Process Component of an IS
- 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
People Component of an IS
- 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
Structure Component of an IS
- the org design: hierarchy, decentralized, loose coupling
- the reporting configuration: functional, divisional, matrix
- the organizational relationships: communication and incentive/reward mechanisms, culture
Value of IS to Managers
- 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
Systemic Effects: Components Working Together
- 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
Purpose of IS
- fulfilling org processing needs
- improve efficiency and effectiveness!
- achieve a specified IS goal
IS Success
- Has the system delivered expected results?
- What are some of the unintended results?
One Size Does Not Fit All
- every org is unique
- fierce competitors often have differences:
--- firm strategy
--- firm culture
--- IT infrastructure
Firm Strategy
the manner in which the org achieves its objectives
Firm Culture
the collection of shared beliefs, expectations, and values
IT Infrastructure
technological backbone of the firm constrains and enables opportunities for future IS projects
External Environment
- the legal and regulatory context
- the competitive landscape
- the general business and social trends surrounding the org
IS and Org Change
First Order Change: Automate
Second Order Change: Informate
Third Order Change: Transform
- first order change
- only affects the technical subsystem
- easiest to envision
- easiest to justify
- easiest to manage
- second order change
- affects the people component
- provides more of a challenge to implement
- third order change
- affects org structures
- seeks to transform how the org operates
- requires significant managerial and executives' involvement
- 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
- limit waste
- maximize the ratio of output produced to inputs consumed
- "Do things right"
- ability to achieve stated goals or objectives
- "Do the right things"
Real-Time Business
- "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
Categorizing Systems
- the hierarchical perspective
- the functional perspective
- the process perspective
Hierarchical Perspective Activities
- strategic
- tactical
- operational
Strategic Activity
Time Horizon: long term
Hierarchical Level: general management; functional management
- externally focused
- ad-hoc
- highly unstructured
Tactical Activity
Time Horizon: mid term
Hierarchical Level: middle management
- repeatable
- semi-structured
- recurrent
Operational Activity
Time Horizon: short term
Hierarchical Level: front line employees
- low discretion
- highly structured
- transaction focused
Hierarchical Perspective Levels
Executive Level - executive IS
Management Level - decision support systems
Operation Level - transaction processing systems
Functional Perspective
systems are designed to support specific needs of individuals in the same functional area
Process Perspective
- 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
Business Integration
- 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
Systems Integration
- tight links between IT-enabled information systems and databases
- primary focus - technology component of the IS
- types of systems integration: internal; external
Integration Trade-Offs
-- benefits --
- reduction of duplication and redundancy
- access to information
- speed
- response time
-- drawbacks --
- increased coordination costs
- reduced local flexibility
Information Integration Imperative
- goal: "real-time" business
- critical success factor: appropriate information available to anyone, anytime, anywhere
- support cross-functional business processes
- streamline and simplify operations
Tools for Enabling Integration
- business process reengineering
- "IS cycle": generalting and analyzing data
- enterprise systems
Business Process Reeingineering (BPR)
- 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
BPR Risks
- 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
The IS Cycle
- data created
- data organized and stored
- data analyzed
- analysis results
Data Created
transaction processing systems
Data Organized and Stored
data repositories
Data Analyzed
analytical tools
Analysis Results
used to guide BPR and process improvement
Enterprise Systems
- class of standardized software application that support integrated business processes
Enterprise System Characteristics
- modular
- integrated
- span all organization functions
- rely on one database at the core
- custom developed or off-the-shelf purchase
Enterprise System Advantages
-- 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
Enterprise System Limitations
- 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
Enterprise System Module: Supply Chain Management
- supply chain: set of coordinated entities that contribute to move a product or service through production to consumption
- upstream supply chain
- downstream supply chain
Modern Supply Chain Management
- 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
Physical Flows
transformation, movement, and storage of goods and materials
Information Flows
- coordination of long-term plans
- control day-to-day flow of materials throughout the supply chain
Supply Chain Management Trends: RFID Tags
- no line of sight requirements
- embedding potential
- read / write capabilities
- storage capacity
- speed up the receiving process
- improve monitoring and control of inventories
Enterprise Application Integration (EAI)
- 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
- data
- information
- knowledge
codified raw facts
data in context
- blend of actionable information
- built over time
- based upon accumulated experiences and understanding
Categories of Knowledge
-- explicit knowledge --
- can be articulated
- codified
- transferred with relative case
-- tacit knowledge --
- knowledge that individuals possess, but find difficult to articulate and document
Knowledge Management
- set of activities and processes to manage knowledge: create, capture, codify, store, and disseminate
- IT is a key component and enabler
Business Intelligence
- 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
ability to understand the interrelationships of presented facts in such a way as to guide action towards a desired goal
Business Intelligence Components
- data warehouse
- data and text mining
- online analytical processing (OLAP)
- business performance management dashboard
- benchmarking
- predictive analytics
Data Warehouse
- consolidates and integrates multiple data sources
- large size and scope
- designed for analytics
Data and Text Mining
- automatic search for non-obvious relationships in large databases ,web and documents
- pattern recognition methodology
Online Analytical Processing (OLAP)
- software that extracts and views data from different perspectives (drill down, roll up)
Enterprise System Module: Customer Relationship Management
- 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
Types of Networks
- physical networks
- virtual networks
Physical Networks
the nodes of the network are connected by physical links: telephone network, railroad network
Virtual Network
- 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)
Network Economics: How is value created in networks?
- value in scarcity
- value in plentitude
Value in Scarcity
the value of a traditional good is a function of its limited availability
Value in Plentitude
the value of a network is a function of the number of connected nodes
Positive Feedback
- self-reinforcing trend: "strong get stronger"; "weak get weaker"
- economies-of-scale: unit costs decline with increasing volume of production
Negative Feedback
- dampening trend: "strong get weaker"; "weak get stronger"
- normal supply and demand equilibrium
- thermostat
Network Effects
- 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
Network Effects Implications
- 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
Tipping Point
- 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
Tippy Market
- subject to strong positive feedback
- “tips” in favor of firm that first reaches critical mass
- winner-take-all outcomes
Factors Influencing Tippy Markets
- 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
Network Economies Summary
- 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
codified raw facts:
- things that have happened
- coded as letters of the alphabet and numbers
- increasingly stored digitally
data in context:
- audience-dependent
Classic "Information" Goods
- products purchased for the sole purpose of gaiing access to embedded information
- products that can be digitized
Information Good Economics
- 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
Information Good characteristics
- customizable
- reusable
- often time-valued
- significant gross profit margins
Information-Intensive Goods
- 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
Information in Networks
- 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
- 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
the number of possible recipients of the message
The Richness and Reach Trade-Off
- the Internet and associated technologies have mitigated the trade-off
- higher levels of both available
- trade-off has not been eliminated
New Business Models
traditional models based upon bundling information with a physical carrier
Modify Product Bundle
- unbundle traditional products
- bundle new combinations of products
Decreasing Value of Asymmetric Information
traditional value proposition based upon the inability of individuals to obtain relevant information at low costs
Sustaining Technology
- 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
Disruptive Technology
- 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
Disruptive Technology Assessment
- 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
The Internet: Definition
a networks of networks, connecting many private, business, academic, and govt computers worldwide into an infrastructure upon which many services are delivered
The Internet: Characteristics
- distributed ownership
- multitude of devices
- open standards
- cheap/free access
Distributed Ownership
different portions owned by different entities
Multitude of Devices
millions of smaller digital networks linking wide-range of intelligent devices (nodes)
Open Standards
agreed upon set of rules or conventions governing communication among Internet nodes - embodied in the "Browser"
Cheap/Free Access
- browser = free
- unlimited Internet access < $50/mo
Internet Policy Issue
- 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"
- online exchange of value
- the process of distributing, buying, selling, marketing, and servicing products and services over computer networks such as the Internet
the use of the Internet technologies and other advanced IT to enable and support business processes and operations
The Enablers
- affordable computing equipment
- access to the Internet
- ease of use
- open standards
Categorizing Ventures by Transaction Type
- B2C
- B2B
- C2C
- C2B
- eGovernment
Categorizing Ventures by Company Structure
- bricks and mortar
- bricks and clicks
- pure play
Business-to-Consumer (B2C)
- involve a for-profit org on one side and the end-consumer on the other
- the most visible kind of eCommerce
Business-to-Business (B2B)
- 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
Consumer-to-Consumer (C2C)
enable individual consumers to interact and transact directly
individuals transact with business organizations not as buyers of goods and services, but as suppliers
- transactions involving legislation and administrative institutions
- can occur with individual citizens, business, or other governments
Bricks and Mortar
"traditional" organizations that have physical operations and locations and don't provide their services exclusively through the Internet
Bricks and Clicks
- 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
Pure Play
- firms with no physical stores: could have physical back-end operations
- providing services exclusively through the internet
Business Models
- 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
Revenue Model
- a component of the business model
- pay for service
- subscription
- advertising support
- referral/affiliate
- freemium
Dominant Business Models
- online retailing
- infomediaries
- content providers
- online communities
- exchanges
- infrastructure providers
Online Retailing
- 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
Infomediaries (Information Intermediaries)
- 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
Content Providers
- develop and publish content
- sources of content: owned; not owned
- revenue model: ad supported, subscription, pay per download
Online Communities
- a group of people brought together by a common interest or goal
- the community is virtual and alleviates the physical constraint
- 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
Infrastructure Providers
- companies that have been able to create value by developing and managing the infrastructure of electronic commerce
- revenue model: pay-for-service
eCommerce Implications
- disintermediation
- re-intermediation
- market efficiency
- channel conflict
- customer and employee self-service
shortening the supply chain by eliminating intermediaries and establishing direct relationship with customers
creating opportunities for new intermediaries to exist alongside their brick and mortar counterparts
Market Efficiency
reducing search costs increase difficulty in profiting from strategies rooted in asymmetry of information or high search costs
Channel Conflict
online channels can be in conflict with traditional physical (retail channels)
Web 2.0: Defining Characteristics
emergent structure; interactive (collective) participation
Web 2.0: Wiki
collective authoring and editing of Web content
Web 2.0: Blog
online journal that individuals publish on the Web
Web 2.0: RSS
- "Real Simple Syndication"
- enables the creation of web feeds
- broadcast to all subscribers once a trigger event occurs
Web 2.0: Tags
used to structure and categorize large quantity of available user-generated content