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1370 Exam Review - Module I.docx

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Robert Brown

ADM1370 Review Module I L ECTURE 1 W HAT ISM ANAGEMENT ? - Planning for what is going to happen - Creating policies and strategies to achieve goals W HAT ISD IGITIZATIO? - Replacing physical tasks by digital means (Facebook) H OW D IGITIZATION CSHANGING B USINESSE NVIRONMENT : Factors to consider when assessing impact of IT: 1. Internet growth and technology convergence o Internet is allowing huge changes in businesses (online banking, emails, voice conferences) 2. Transformation of businesses o Flatter organizations, less centralization, higher employee empowerment, greater teamwork, location independence 3. Growth of globally connected economy o Global marketplace, world markets, global teams (working in many countries) 4. Growth of knowledge and info-based economies o New products and services, knowledge is an asset, time-based competition 5. Emergence of digital firms o Relationships with customers enabled by digitalization, business processes accomplished using digital networks, seamless flow of information CAPITAL M ANAGEMENT AND B USINESS - Information and Communications Technology (ICT) is the largest component of capital investment o Managers need to know how to invest it wisely o Success of business can depend on how well you make ICT investment decisions o Examples: using social networking to get a strategic advantage INTRODUCTORY CASE AUTO INDUSTRY - Emphasis of course is on using information systems to gain competitive advantage - More interaction (technology) between car companies and suppliers so they can adjust the delivery of parts according to volume W HY IS THEW ORLD FLATTENING ? - Globalization boarder are reduced, worldwide communication - Tom Friedman gave a list of factors that are causing flattening (business ICT systems are playing a role) - Global economic playing field has been levellednew strategies and solutions are needed to succeed - Challenges: political system, culture, regulations, people, internet access/freedom REMEMBER : - Digital firms use information systems to create a seamless flow of information - This leads to new levels of efficiency, competitiveness, and profits ADM1370 Review Module I L ECTURE 2 POWER OF THE INTERNET - Internet is a very powerful tool (help get jobs back) INFORMATION SYSTEMS COMPONENTS 1. Technology knowledge 2. Application domain knowledge 3. Systems development knowledge 4. Organizational knowledge 5. IS application knowledge** THREE KEY CONCEPTS 1. Business processes and how IT support them (What they do) 2. Changing paradigm of information and communication technologies (how to use technology to improve the business processes) 3. How to improve technology to improve the business processes (become more competitive) BUSINESS P ROCESSES WHAT A COMPANY DOES AS PART OF THEIR DAILY ROUTINE (MANUFACTURING , CUSTOMER SERVICE ) - These business processes are largely dependent on technology more competitive, more profitable - The way work is organized, coordinated the set of activities - The way management coordinates work - Information systems help create efficiency by automating parts of these business processes o Important to always rethink the process, make it more efficient, make it span several functional areas IDENTIFYING C OMPETITIVE A DVANTAGES - Competitive advantage product or service that organizations customer place greater value on than similar offers from competitors - First-mover advantage organization can significantly impact market share by being first to market with a competitive advantage o Problem: others will quickly follow suit, you will soon not be the only one THE FIVE FORCES M ODEL - Porters Five Forces Model determines attractiveness of an industry - 5 things you need to consider to determine how big of a threat you will be to competition: o Rivalry among existing competitors o Threat of substitutes o Threat of new entrants o Supplier power o Buyer power high when buyers have lots of choices Use IT to reduce buyer power through loyalty programs (keep coming back) ENTERPRISE IT YSTEMS Organizations use IT to support strategic initiatives including: - Supply chain management (SCM) systems ADM1370 Review Module I o Takes all people in the supply chain and links them under one system (supplier, manufacturer, distributor) makes it more efficient, helps distribute goods to customers - Customer relationship management (CRM) systems o Uses information system to better understand and react to customers needs. Tires to avoid conflicts with customers and deal with complaints. - Enterprise resource planning (ERP) systems o Help an organization become more integrated o Link their processes to everyone shares info and communicates with each other O RGANIZATIONAL /B EHAVIOURAL IMPACTS - IT allows info to be spread to more people, info circulates faster - Decisions made faster - Employees more empowered, spam of control is increased - GREATER FLEXIBILITY - Hierarchies are flattened info is distributed to lower-level employees, so less management is needed 10 F LATTENERS Flattener 1: The Fall of the Berlin Wall - Made certain areas of the world more accessible opened new markets world became smaller - Fall of communism - People from communist countries gained freedom Flattener 2: Netscape Browser - First mainstream browser - Gave individuals access to the Internet Flattener 3: Work Flow Software - Allow people to communicate worldwide and share ideas Flattener 4: Open Sourcing - Software freely available to everyone (at no cost) - Blogs, Wikipedia, Wikis Flattener 5: Outsourcing (just ONE business process) - Companies benefit from the drop in telecommunications costs - You can now use talented workers anywhere in the world Flattener 6: Offshoring (physically moving to another area) - Companies set up factories in other countries mass production and low costs - Internet enables communication between the areas Flattener 7: Supply Chaining - Integration of suppliers, retailers, and customers - Using technology to make supply chain efficient RFID tags ADM1370 Review Module I Flattener 8: In-Sourcing - Delegation of companys key operations to subcontractor - UPS now does computer repairs for companies in their plants to avoid sending them away (cheaper) Flattener 9: In-Forming - This is to individuals what outsourcing, offshoring, and in-sourcing is to companies - Individuals have access to massive amounts of information - You can get and send info faster easy for people to access Flattener 10: The Steroids - Personal devices (phones, iPods) o Virtual can be done at high speeds with ease o Mobile can be done anywhere, anytime o Personal can be done by you IMPACT OF THE INTERNET P OSITIVE MPACT - Opportunities that alter how business processes are conducted (higher efficiency) - New opportunities for building brands and customer relationships (CRM) - Companies that are better with information systems and the internet deal better with Porters 5 Threats IMPACT OF THE INTERNET N EGATIVE MPACT - Substitute products or services (online music vs. records) - Customers bargaining power they have access to more info on pricing, so they can bargain - Suppliers bargaining power have more options to sell their products - Threat of new entrants Internet reduces barriers to entry (Netflix and Blockbuster) - Rivalry among existing competitors Internet widens geographic market, so there are more potential competitors SUMMARY - Think of processes, IT, and strategies as an integrated bundle - IT has changed how we access and use information (especially the internet) - Businesses must innovate to become more competitive.
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