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Department
Information Technology Management
Course
ITM 102
Professor
Else Grech
Semester
Fall

Description
Alyssa Soubliere Ryerson Unistrsity October 21 , 2013 ITM102 Chapters1-6MidtermReview Chapter One Basics Information Systems (IS) - computer-based tools people use to work with information and support the information and processing needs of an organization Information Technology (IT) – the acquisition, processing, storage, and dissemination of vocal, pictorial, textual, and numerical information by a microelectronics-based combination of computing and telecommunications Management Information Systems (MIS) – Function that plans for, develops, implements, and maintains IT hardware, software, and applications that people use to support the goals of an organization Data, Information & Knowledge Data – raw facts that describe the characteristics of an object or event (date, item number, item description, quantity ordered, customer name). Information – data converted into a meaningful and useful context (bestselling or worst selling item, etc.) Knowledge – actionable information (information that can be acted upon) “People use processes to work with information systems to produce information” Information Cultures Information-Functional Culture – employees use information as a means of exercising influence or power over others Information-Sharing Culture – employees across departments trust each other to use information (usually about problems & failures) to improve performance Information-Inquiring Culture – employees across departments search for information to better understand the future and align themselves with current trends and new directions Information-Discovery Culture – employees across departments are open to new insights about crisis and radical changes and seek ways to create competitive advantages Roles and Responsibilities Chief information officer (CIO) – Oversees all uses of IT and ensures the strategic alignment of IT with business goals and objectives Chief knowledge officer (CKO) - Responsible for collecting, maintaining, and distributing the organization’s knowledge Chief privacy officer (CPO) – Responsible for ensuring the ethical and legal use of information Chief security officer (CSO) – Responsible for ensuring the safety of IT resources including data, hardware, software, and people Chief technology officer (CTO) – Responsible for ensuring the throughput, speed, accuracy, availability, and reliability of IT Alyssa Soubliere Ryerson University st October 21 , 2013 ITM102 Identifying Competitive Advantage Competitive advantage – a product or service that an organization’s customers place a greater value on than similar offerings from a competitor First-mover advantage – occurs when an organization can significantly impact its market share by being first to market with a competitive advantage Environmental scanning – the acquisition and analysis of events and trends in the environment external to an organization Three Common Tools Used to Evaluate: – Porter’s Five Forces Model – Porter’s three generic strategies – Value chains Five Forces Model • Buyer power – high when buyers have many choices of whom to buy from and low when their choices are few • Supplier power – high when buyers have few choices of whom to buy from and low when their choices are many • Threat of substitute products or services – high when there are many alternatives to a product or service and low when there are few alternatives from which to choose • Threat of new entrants – high when it is easy for new competitors to enter a market and low when there are significant entry barriers to entering a market • Rivalry among existing competitors – high when competition is fierce in a market and low when competition is more complacent Buyer Power – The ability of buyers to affect the price of an item – Switching cost – Manipulating costs that make customers reluctant to switch to another product – Loyalty program – Rewards customers based on the amount of business they do with a particular organization Supplier Power – High when buyers have few choices of whom to buy from and low when their choices are many – Supply chain – consists of all parties involved in the procurement of a product or raw material Business-to-Business (B2B) marketplace – an Internet-based service that brings together many buyers and sellers Alyssa Soubliere Ryerson University October 21 , 2013 ITM102 - Organizations can create a competitive advantage by locating alternative supply sources (decreasing supplier power) through B2B marketplaces Two types of B2B marketplaces: – Private exchange – a single buyer posts its needs and then opens the bidding to any supplier who would care to bid – Reverse auction – an auction format in which increasingly lower bids are solicited from organizations willing to supply the desired product or service at an increasingly lower price Threat of Substitute Market or Product  Threat of substitute products or services – High when there are many alternatives to a product or service and low when there are few alternatives  Threat is reduced when Switching Costs are high. Threat of New Entrants o Threat of new entrants – High when it is easy for new competitors to enter a market and low when there are significant entry barriers – Entry barrier – A feature of a product or service that customers have come to expect and entering competitors must offer the same for survival Rivalry Among Competitors o Rivalry among existing competitors – High when competition is fierce in a market and low when competitors are more complacent – Product differentiation – Occurs when a company develops unique differences in its products or services with the intent to influence demand Three Generic Strategies *Organizations are encourages to follow only ONE strategy* Value Chain Analysis o Business process – A standardized set of activities that accomplish a specific task, such as a specific process o Value chain analysis – Views a firm as a series of business processes that each add value to the product or service Chapter Two Operational Decision-Making • Operational decision making - Employees develop, control, and maintain core business activities required to run the day-to-day operations Alyssa Soubliere Ryerson University October 21 , 2013 ITM102 • Structured decisions - Situations where established processes offer potential solutions Managerial Decision-Making • Managerial decision-making – Employees evaluate company operations to identify, adapt to, and leverage change • Semi-structured decisions – Occur in situations in which a few established processes help to evaluate potential solutions, but not enough to lead to a definite recommended decision Strategic Decision-Making • Strategic decision making – Managers develop overall strategies, goals, and objectives • Unstructured decisions – Occurs in situations in which no procedures or rules exist to guide decision makers toward the correct choice Metrics • Metrics – Measurements that evaluate results to determine whether a project is meeting its goals • Common Types - – KPIs – Key Performance Indicators – Efficiency and Effectiveness Benchmarking • Benchmark – Baseline values the system seeks to attain • Benchmarking – A process of continuously measuring system results, comparing those results to optimal system performance (benchmark values), and identifying steps and procedures to improve system performance Key Performance Indicators (KPI’s) • Key performance indicators (KPIs) – The quantifiable metrics a company uses to evaluate progress toward critical success factors – Turnover rates of employees – Number of product returns – Number of new customers – Average customer spending Efficiency and Effectiveness Metrics • Efficiency metrics – Measure the performance of IS itself, such as throughput, transaction speed, and system availability • Effectiveness metrics – Measures the impact IS has on business processes and activities, including customer satisfaction and customer conversation rates Efficiency IS Metrics Throughput The amount of information that can travel through a system at any point in time. Alyssa Soubliere Ryerson University October 21 , 2013 ITM102 Transaction Speed The amount of time a system takes to perform a transaction. System Availability The number of hours a system is available for users. Web Traffic Includes a host of benchmarks such as the number of pages viewed, the number of unique visitors and the average length of viewing time. Response Time The time it takes to respond to interactions such as a mouse click. Usability The ease with which people perform transactions and/or find information. Customer Satisfaction Measured by such benchmarks as satisfaction surveys, customer retention percentages, and increasing revenue per customer. Conversion Rates The number of customers an organization “touches” for the first time and persuades to purchase a product/service. Financial Such as Return on Investment (the earning power of an organization’s assets), Cost/Benefit Analysis and Break Even Analysis. Transaction Processing Systems • Transaction processing system (TPS) – Basic business system that serves the operational level and assists in making structured decisions • Online transaction processing (OLTP) - Capturing of transaction and event information using technology to process, store, and update • Source document – The original transaction record Decision Support Systems • Decision support system (DSS) – Models information to support managers and business professionals during the decision-making process • Online analytical processing (OLAP) – Manipulation of information to create business intelligence in support of strategic decision making • Three quantitative models used by DSS include: • What-if analysis • Sensitivity analysis • Goal-seeking analysis Artificial Intelligence • Artificial intelligence (AI) – Simulates human intelligence such as the ability to reason and learn • Intelligent system – Various commercial applications of artificial intelligence Alyssa Soubliere Ryerson Unstersity October 21 , 2013 ITM102 Business Processes Customer facing processes – result in a product or service that is received by an organization’s external customer. Business facing processes – are invisible to the external customer but are essential to the effective management of the business Business Process Re-engineering Business process – a standardized set of activities that accomplish a specific task, such as processing a customer’s order Business process improvement – attempts to understand and measure current processes and upgrade them. Business process re-engineering (BPR) – the analysis and redesign of workflow within and between enterprises Business Process Modelling • Business process modeling (or mapping) - The activity of creating a detailed flow chart or process map of a work process showing its inputs, tasks, and activities, in a structured sequence • Business process model - A graphic description of a process, showing the sequence of process tasks, which is developed for a specific – As-Is process model – To-Be process model Chapter Three Disruptive Technology Digital Darwinism – implies that organizations which cannot adapt to the new demands placed on them for surviving in the information age are doomed to extinction. Disruptive vs. Sustaining – Disruptive technology – a new way of doing things that opens new markets and destroys old ones. – Sustaining technology – Produces improvements to products that customers are eager to buy. Internet… Disruptive Business Technology o One of the biggest forces changing business is the Internet. Alyssa Soubliere Ryerson University October 21 , 2013 ITM102 o Organizations must be able to transform as markets, economic environments, and technologies change. Focusing on the unexpected allows an organization to capitalize on the opportunity for new business growth from a disruptive technology Evolution of the Internet – Internet – computer networks that pass information from one to another using common computer protocols. – Protocol – standards that specify the format of data as well as the rules to be followed during transmission. – World Wide Web (WWW) – a global hypertext system that uses the Internet as its transport mechanism – Hypertext transport protocol (HTTP) – the Internet standard that supports the exchange of information on the WWW – The Internet’s impact on information: – Easy to compile. – Increased richness. – Increased reach. – Improved content . – It can also cause a gap between winners and losers in the game of business: – Digital divide – when those with access to technology have great advantages over those without access to technology. Web 2.0 o Web 2.0 is a set of economic, social, and technology trends that collectively form the basis for the next generation of the Internet. Mash-ups o Mash-up – Website or Web application that uses content from more than one source to create a completely new product or service – Application programming interface – Mash-up editor Web 3.0 o Web 3.0 – Based on “intelligent” Web applications using natural language processing, machine-based learning and reasoning, and intelligence applications o Semantic Web – Structuring data so web pages describe things in a way that computers can “understand” and, thus, find, share and integrate ideas more effectively for people. o The Semantic Web encompasses one or more of the following: o Transforming the web into a database. o An Evolutionary Path to artificial intelligence. o The realization of the semantic Web and SOA (service –oriented architecture) Alyssa Soubliere Ryerson University October 21 , 2013 ITM102 o Evolution toward 3D. Accessing Internet Information o Four tools for accessing Internet information 1. Intranet – internalized portion of the Internet, protected from outside access, for employees 2. Extranet – an intranet that is available to strategic allies 3. Portal – Web site that offers a broad array of resources and services 4. Kiosk – publicly accessible computer system that allows interactive information browsing Providing Internet Information o Three common forms of service providers 1. Internet service provider (ISP) –provides individuals and other companies access to the Internet 2. Online service provider (OSP) – offers an extensive array of unique Web services 3. Application service provider (ASP) – offers access over the Internet to systems and related services that would otherwise have to be located in organizational computers o Common ISP services include: 1. Web hosting 2. Hard-disk storage space 3. Availability 4. Support o ISPs, OSPs, and ASPs use service level agreements (SLA) which define the specific responsibilities of the service provider and set the customer expectations E-Business Basics – E-commerce – the buying and selling of goods and services over the Internet – E-business – the conducting of business on the Internet including not only buying and selling, but also serving customers and collaborating with business partners Opening New Markets o Mass customization – The ability of an organization to tailor its products or services to the customers’ specifications o Personalization – Occurs when a company knows enough about a customer’s likes and dislikes that it can fashion offers more likely to appeal to that person o The Long Tail – Refers to the tail of a typically sales curve o Intermediary – Agents, software, or businesses that provide a trading infrastructure to bring buyers and sellers together o Disintermediation o Re-intermediation o Cybermediation Alyssa Soubliere Ryerson University October 21 , 2013 ITM102 Advantages of E-business o Reducing Costs—Business processes that take less time and human effort. o Improving Operations—Communications customized to meet consumer needs and available 24/7. o Improving Effectiveness—Web sites must increase revenue and new customers and reduce service calls o Interactivity metrics measure E-business success: number of repeat visits, times spent on site and number of pages viewed among other activities. Advantages of the Web o Improving Effectiveness through E-business marketing – Associate (Affiliate) programs – Banner Ads – Tracking Click-throughs – Cookies – Pop-up ads – Viral marketing Measuring Website Success o Stickiness—visit duration time. o Raw Visit Depth—total Web page exposures per session. o Unidentified visitor—no information about visitor is available. o Unique visitor—recognized and counted once in a period of time. o Identified visitor—can be tracked across multiple web visits. o Hits—A single request made by a visitor to view a web page. Business Models o Types of Businesses: – Brick and Mortar—Physical store, no Web site. – Pure-play (virtual) business—Web site only. – Click and Mortor—Physical store and Web site. o E-auctions are a successful E-business model. – Forward Auction—Seller offers to many buyers who bid and the highest bid wins. – Reverse Auction—Buyer specifies product or service and lowest seller bid wins contract. Business-to-Business o Electronic marketplace (e-marketplace) – interactive business communities providing a central market where multiple buyers and sellers can engage in e-business activities Business-to-Consumer (B2C) o Common B2C e-business models include: Alyssa Soubliere Ryerson University October 21 , 2013 ITM102 – e-shop – a version of a retail store where customers can shop any time without leaving their home • Als
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