ITM Chapter 3.doc

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Ryerson University
Information Technology Management
ITM 102
Ross Mc Naughton

Chapter 3 - Creating Business Value Business Organization and Business Processes - A company need a business strategy. - Strategy is a broad based formula for how a business is going to compete, what its goals should be, and what plans and policies will be needed to carry out those goals. - If the industry is attractive and has few barriers, more competitors will enter the indus- try thus increasing competition. - If the there are barriers, then it will be harder for new competitors to join the industry. Businesses as Open Systems - Open systems model indicates that business operates by transforming inputs into out- puts and by constantly interacting with its environment. Stakeholders and Boundaries in the Business Environment - A stakeholder is a person or entity that has interest in and an influence on how a busi- ness will function in order to succeed. - May be external or internal relative to the system. - Organizational boundary shows business operates by transforming inputs into outputs and by constantly interacting with its environment. - A business needs external information to run its operations or processes on a daily ba- sis. How Businesses Organize to Create Value Chapter 3 - Creating Business Value - All business organizations possess structures that organize information, responsibility, and authority. - When used appropriately, organizational structure helps get the job done. - When misused, organizational structure can grow to an unmanageable size and densi- ty and can create a bureaucracy that seems to inhibit rather than facilitate productive work. - Functional and decentralized structures, the lines of authority and communication are vertically oriented. - Matrix structure blends the functional and decentralized organizational structures. - A business might used a matrix structure to take advantage an of the strengths, as well as make up for the weaknesses of functional and decentralized forms. Business Process - To transform inputs to their main outputs, organizations need to perform a series of step known as a business process. - Defined as a collection of activities that takes one or more kinds of input and creates an output that is of value to the customer. - Input ---> Process ---> Output - A process receives inputs, undertakes some action, and then produces outputs. - IGOE - Inputs to a process are those resources needed to start a process. - Guides are rules or policies within which a process must operate. - Outputs are the results of a process. - Enablers are a special kind of input or resource that facilitates a process. - Feedback is a special kind of measurement created by a business process that is then retuned to the system to control the system’s future inputs, processes, and outputs. - Businesses use feedback to monitor the efficiency and effectiveness of a given process. - Business process reengineering (BPR) is the study of business processes to find ways of making them more efficient. - BPR goals are to reduce costs, increase throughput and speed, and increase quality and service. Defining Competitive Advantage - Continuous improvement is the hallmark of successful enterprises, those that are nev- er satisfied with good enough, but strive to to set new standards and benchmarks. Chapter 3 - Creating Business Value - Competitive advantage = quality of insight + speed of execution + cost competitiveness - Good IT systems are deployed to improve the quality of insight of those making deci- sions, to improve the speed of execution, to reduce costs, and to increase t
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