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Comm 190 MIS Midterm Exam Review

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COMM 103
Gary Bissonnette

MIS Midterm Exam Review Oct 2013 Chapter 1 (Q1-Q5) / Lecture 1 Information system (IS) – a group of components that interact to produce information. Comprise of a five-component framework of: computer hardware, software, data, procedures, and people Management information systems (MIS) – comprise the development and use of information systems that help organizations achieve their goals and objectives 1. Components of an IS 2. Achieving business goals & objectives 3. Implementation of an IS Information Technology (IT) – refers to methods, inventions, standards, and products. Refers to raw technology, such as the hardware, sotware and data compoents of an IS -IT will not help an organization reach its goals and objectives by itself, only when embedded into an IS – when combined when the people and procedure components – is it useful Chapter 2 (Q1-Q6) / Lecture 2 Business process – a series of tasks or steps designed to produce a product or a service (also can be referred to as a business system) i.e. inventory management processes, manufacturing processes, sales processes, customer support processes -consists of activities, resources, facilities, and information: Activities – can consist of purely manual activities (people following procedures), be automated or controlled by computers (hardware directed by software), or be a combination of both Resources – items of value i.e. a person working, the supplier the customer’s cash, a case of milk Facilities – structures used within the business process i.e. factories, pieces of equipment, filing cabinets, inventories & databases Information – activities use information to determine how to transform the inputs they receive into the outputs they produce “process excellence is improving the way that businesses create and deliver value to customers” Business Process Modeling Notation (BPMN) – a standard set of terms and graphical notations for documenting the business process Information is data presented in a meaningful context, or processed data i.e. data is the fact that Jeff earns $10 an hour, while information is that Jeff earns less than half the average hourly wage of the garden department he works at Characteristics of Good Information: Accurate – based on correct and complete data, and has been processed correctly as expected Timely – produced in time for its intended use Relevant – to the contect and the subject at hand Just barely sufficient – there is a lot of information, some of which must be ignored, so info should be sufficient, but just barely so Worth its cost – there must be an appropriate relationship between the cost of information and its value Business process management (BPM) – using information generated from business processes to determine how the process can be improved i.e. using the info in the inventory database to assess an inventory ordering strategy, or to determine how much the organization is losing from waste and theft losses -promotes the development of effective and efficient processes through continuous improvement and innovation -total quality management, six sigma, and lean production are methods of BPM Automated system – work formerly done by people who followed procedures has been moved so that computers now do work by following instructions in software In the above diagram, people and hardware are both actors since they can take actions, while the software and procedure components are both sets of instructions: software is instructions for hardware, and procedures are instructions for people. Examples: Counter Sales at a Tim Horton’s: Hardware Software Data Procedures People -cash register -sales- -sales data -operate cash -cashier computer recording -inventory register -database host program on database computer cash register Mostly an automated system – almost all work done by computers and software Payment System – A/P clerk Hardware Software Data Procedures People -personal -adobe -qty -reconcile receipt document -accounts computer acrobat received with invoice payable reader -shipping -issue payment authorization, if -email invoice appropriate -process exceptions Mostly a manual system – almost Benefits of networked IS: all work done by a/p clerk  Faster  Efficiency  Consistency across franchises  Faster problem resolution (can pinpoint what went wrong)  Can see from anywhere -the majority of IS issues begin at counter sales, where orders are inputted wrong Disadvantages of IS  An issue at any step could bring the whole system down  Workers are only are of what they have to do – don’t understand the whole system Chapter 11 (Q1 & Q2) / Lecture 2 Chief Information Officer (CIO) - a common title for the principal manager of the IT department. Reports to the CEO, CFO, or COO Chief Technology Officer (CTO) – often heads the technology group that investigates new IS technologies and determines how the organization could benefit from them Slides: A Typical IS/IT department: 1. Business solutions group – builds, enhances, and supports business applications i.e. stores payment and loyalty systems (customer facing), logistics systems (product movemet), financial and HR systems (support functions), merchandising systems (product buying and pricing) – includes roles like programmers, systems analysts, business analysts, solution architects, project managers 2. Technology group – manages the technology – setup and maintain the processors, desktops, databases, networks, etc. “keep the lights on”. Includes roles like database analysts, info security and risk management analysts, data network specialist, computer operators etc. a. IT service management b. Info security c. Planning and performance (capacity) d. Enterprise systems software e. Network management 3. IS planning and control/IS business operations – provides governance for the other two groups – very specialized a. IT architecture/enterprise architects b. IS methodologies c. Project management practices/project control office d. IS financial reporting controls e. IS finance (accounting) f. Supplier relationship management CEO/COO HR Legal VP Marketing VP Sales CIO VP CFO VP Engineering Manufacturing Data Administration Operations Development Outsourcing Relations Technology (CTO) Textbook: A typical IT department: 1. Technology – investigates new IS technologies and determines how the organization can benefit from them 2. Operations – manages the computing infrastructure, including individual computers, computer centres, networks, and communications media, includes network/system administrators 3. Development – manages projects that acquire new IS as well as maintains existing IS, includes business/systems analysts 4. Outsourcing relations – exists in organizations that have negotiated outsourcing agreements with other companies, this department monitors service levels and focuses on developing good relations with them 5. Data administration – protects data and information assets by establishing data standards and data management practices and policies Chapter 3 (Q1-Q7)/Lecture 3 Productivity paradox – the question of how IT adds to productivity and how it can be used to create business value. In 1989, Stephen Roach said that he found no evidence of an increase in labour productivity along side a massive investment in IT – could be from measurement error, intangible benefits. Also, some firms invest in technology for technology’s sake, which does not increase productivity but only increases costs 3 different ways through which the value of IT can be realized: 1. productivity – IT allows a company to create more/better output from the same inputs and do so faster 2. Structure of competition – firms can compete on the basis of IT and the technical support they can provide, the industry can change (i.e. blockbuster to Netflix) 3. Benefits to the end customer – processes more efficient and nature of competition changed, costs therefore reduced and passed on to final consumer, who sees cheaper and better goods BTM – business technology management, programs designed for students who are inspired to use technology to change the way the worl does business Efficiency – increased when business processes can be accomplished either more quickly or with fewer resources and facilities (or both) – “doing things right” Effectiveness – increased when companies consider offering either new or improved g/s that the customer values, often requires a change in business processes – “doing the right things” -companies must find a balance between efficiency and effectiveness, don’t want to focus too much on efficiency while customers begin to demand different product, or focus to must on effectiveness and getting the perfect product but have a completely inefficient process to manufacture it Value chain – a network of activities that improve the effectiveness (or value) of a good or service. Each business process adds value, the more value that is added, the higher the price the company can charge for the final product Margin – the difference between the price the customer is willing to pay and the cost the company incurs in moving the goods or services through the value chain Primary activities – activities in which value is added directly to the product i.e. shipping raw materials, designing the tires, manufacturing the tires etc. Support activities – activities that support the primary activities, such as maintaining the machines in the factory, making the heat work, scheduling the shipping of the tires. Add value only indirectly Porter’s Value Chain Model Primary Activity Description Inbound Logistics Receiving, storing, and disseminating inputs to the product Operations Transforming inputs into the final product Outbound Collecting, storing, and physically distributing the product to Logistics buyers Marketing and Inducing buyers to purchase the product and providing a Sales means for them to do so Service Assisting customer’s use of the product and thus maintaining and enhancing the product’s value -IS can increase productivity by enabling the development of more efficient & effective supporting activities, like financial accounting systems, HR systems, CRM systems, etc -also, it can offer improve primary activities, such as making online shopping, package tracking and customer support a possibility Porter’s Five Forces Model – used to assess an industry structure, says that five competitive forces determine industry profitability: Suppliers Customers 3. Bargaining 1. Bargaining power of power of suppliers customers New Substitute 4. Threat Vendors of new 5. Rivalry Vendors entrants 2. Threat of among substitutions existing firms Porter’s Four Competitive Strategies Competitive Advantage COST DIFFERENTIATION INDUSTRY- Lowest Cost product/service WIDE across the across the industry industry Target market scope Better FOCUS Lwithin ant product/service industry within an segment industry segment IT impact on… a) Bargaining power of customers – using IT, companies can establish direct connections with their customers. There is increased transparency (customers can compare offerings and have higher expectations regarding cost savings). Switching costs are lower since you can compare prices and order online, sites like kijiji can help you cut your losses by selling old product when switching b) Bargaining power of suppliers - using IT, companies can establish direct connections with their suppliers. Suppliers prefer distributors with efficient and integrated systems. Suppliers have the ability to disintermediate (cut you out). c) Rivalry among existing competitors – using IT, competitors can aggressively discount prices to attract customers, can continually shorten product development cycles, and can streamline procurement and distribution channels to cut costs. Also, there is increased transparency and ease of imitation d) Threat of new entrants and substitutes – using IT businesses can compete on a global scale. Non traditional competitors have lower barriers to market entry, new middlepersons can enter the market e) Generic strategies – IT can improve the cost, timing, and quality of info flows f) Business Opportunities – three S’s model: a. Substitution effect i.e. vehicles in place of horses, phone in place of mail b. Scale effect – economies of scale – more frequent and extensive travels and communication. i.e. online channels enable businesses to connect with many consumers that were previously unreachable. Mediators create a scale effect since they consolidate buyers and sellers in a market that is fragmented, increasing transaction volume since it’s efficient c. Structural effect – A synthesis of the substitution and scale models and other strategies to disrupt the value chain. What industries will be fundamentally altered by an innovation? i.e. highways, suburbs, malls, globalization, industry convergence Competitive strategy – a firm can engage in any of the four fundamental competitive strategies in the model above to respond to the five forces Sustaining technologies – changes in technology that maintain the rate of improvement in customer value i.e. the vulcanization of rubber tires allowed tire manufacturers to produce tires that facilitated faster and more comfortable rides, improving the experience of driving a car and sustaining the original innovation. Or, improved size and speed of electronic memory Disruptive technologies – introduce a very new package of attributes to the accepted mainstream products i.e. the advent of the mp3, creation of ATMs -sometimes, the competitive advantage created by used a disruptive technology leads to a new industry i.e. the creation of the microcomputer led to the creation of google, Microsoft, apple, etc. Diffusion of innovation – the process by which an innovation is communicated through certain channels over time among the members of a social system, consists of five stages: 1. Knowledge – you first hear about an innovation but lack specific info on it 2. Persuasion – you become interested in the innovation and find out more about it 3. Decision – you consider the pros and cons of adopting the innovation and make a decision as to adopt or reject it 4. Implementation – you use the innovation and figure out whether to continue using it or look for an even better way 5. Confirmation – you use the innovation to its full potential -an individual/organization can end the process at any point How do information systems provide competitive advantage? Via Product Implementations:  Create a new product or service  Enhance products or services  Differentiate products or service i.e. using the internet to provide additional services, scheduling that supports the product and lets you reduce the price Via Business Processes/System implementations:  Lock in customers and buyers  Lock in suppliers  Raise barriers to market entry  Establish alliances  Reduce costs i.e. make it difficult or expensive for customers to switch to another product (adding switching costs), make it easy for suppliers to connect to and work with your organization (lock them in) -Long term competitive advantage lies not with the technology but rather in how a company and its people adopt the technology Sustained competitive advantage – developing procedures and people that are well supported by the underlying technology. It is achieved when companies find a distinctive way to compete; the emphasis should be placed on developing increasingly sophisticated integration of IT and people and procedures in the organization. Companies with sustained competitive advantage work to integrate many activities;: marketing, customer service, product design/delivery etc. so that competitors have to match the whole system Jay Barney’s Resource Based View (RBV) -internal ‘firm’ view, focused on organization’s heterogeneous resources (assets and capabilities); focuses on resources that serve as internal drivers of profit Non Imitable Value + Rarity + Non Transferable Non Substitutable Competitive Advantage Sustained Competitive Advantage Classic and Modern IT Questions Classic – Tools Modern – Weapons 1. What information do I need to 1. What new products and services run my business? can I offer 2. What technology do I need to 2. What new processes can I design manage the information and execute 3. What policies do I need to 3. What new businesses can I create organize the information and and build? technology The economic of IT Information economy (no trade off) -where reach describes connectivity and richness describes factors like bandwidth, customization, and interactivity, in an information economy reach can increase without sacrificing richness, while in a classical economy it cannot Creative destruction – constantly innovate destroying old markets and creating new ones i.e. books to ebooks, VHS to DVD to blueray etc.  firm or industry level Blue ocean strategy – don’t compete in existing markets (red oceans), rather create new markets (blue oceans) Ch 4 (Q1-Q6) / Lecture 4 Evolution of IT in Business 1. Mainframe era (1952-present) – computers were giant boxes, took highly skilled teams to operate, mainly used by government and businesses 2. Micro era (1975-present) – individual PCs, you could operate it, had to share with physical hardware. Initially had no display screen or monitor and users developed their own programs 3. Network era (1985-present) – computers working together to share information 4. Mobile and Tablet Computing (late 1990s – present) – small, lightweight, fast, powerful, and easy to use network devices Summary: 1. Price and performance advances – IT is continuously evolving, price of processing power, data storage, and network capacity continuously decreasing and quality increasing 2. Small is powerful – IT becomes smaller and more powerful with time 3. The network is the thing – all computing machines moving toward networks for communication and collaboration and the bandwidth (rate that computers can communicate) is increasing significantly Hardware – consists of the physical electronic components and related gadgetry that input, process, output, and store data according to instructions encoded in computer programs or software All computers consist of four basic components: input, processing, output, and storage Input devices – devices that YOU interact with, like a scantron scanner, the keyboard, the mouse, etc Processing devices – include the central processing unit Output hardware – you also interact with this hardware, but only in a way that you can view/hear results, not ‘enter’ anything i.e. monitor, printer, speakers, overhead projectors etc. Storage hardware – saves data and programs Special function cards – can be added to augment components of a computer i.e. video cards to support an additional monitor CPU – Central processing unit – the ‘brain of the computer’, it selects instructions, processes them, performs arithmetic and logical comparisons, and stores results of operations in memory. Performance is measured in Hertz or cycles. Works in conjunction with the computer’s main memory (or RAM, random access memory). The CPU reads data and instructions from the RAM and stores the results of its computations in the main memory Binary digits – bits – the way computers represent data, is either a zero or a 1 -easy to represent physically, can be used in conjunction with magnetism Term Definition Abbreviation Byte Number of bits to represent one character Kilobyte 1024 bytes K Megabyte 1024k = 1 048 576 bytes MB Gigabyte 1024MB GB Terabyte 1024GB TB Petabyte 1024TB PB How does a computer work? To run a program or process data, the CPU first transfers the program/data from a disk to the main memory. To execute an instruction, it then moves the instruction from the main memory into the CPU via the data channel or bus. The main memory is too small to hold all the programs and data that a user may want to process, so it loads programs into the memory in sections. For example, if the user is using excel, it will load one portion of it into the memory, and if the user requires additional processing, the CPU loads another piece of excel Memory swapping – if the CPU removes some block of memory from the man memory to load a different program into the main memory Cache – a small amount of very fast memory in the CPU where it keeps frequently used instructions Operating system (OS) – a program that controls the computer’s resources as well as a block of data Volatile – contents are lost when power goes off i.e. the cache and main memory Nonvolatile – contents survive even if power goes off i.e. USB sticks, optical disks, magnetic disks -we use both types of memory since nonvolatile memory is slower, more expensive, and harder to change Hertz – the speed or number of cycles per second a computer works at Client computers – used for word processing, spreadsheets, database access etc. and often have software that enables them to connect to a network Serv
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