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Chapter 1

ITM 102 Chapter Notes - Chapter 1: Customer Relationship Management, Enterprise Resource Planning, Information System

Information Technology Management
Course Code
ITM 102
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Information Systems’ Impact on Business Operations
Which types of IS services can be used to meet these types of goals?
Reduce costs/ improve productivity: supply chain management, enterprise resource
Improve customer satisfaction/loyalty: customer relationship management, loyalty
Create competitive advantage: business intelligence/data warehousing
Generate growth: sales management systems
Streamline supply chain: demand planning software
Global expansion: e-business
Information Systems’ Impact on Business Operations
Accounting provides quantitative information about the finances of the business including
recording, measuring, and describing financial information
Finance deals with the strategic financial issues associated with increasing the value of the
business, while observing applicable laws and social responsibilities
Human resources includes the policies, plans, and procedures for the effective
management of employees (human resources)
Sales is the function of selling a good or service and focuses on increasing customer sales,
which increases company revenues
Marketing is the process associated with promoting the sale of goods or services. The
marketing department supports the sales department by creating promotions that help sell
the company’s products
Operations management (also called production management ) includes the methods,
tasks, and techniques organizations use to produce goods and services. Transportation
(also called logistics) is part of operations management.
Management information systems (MIS) is the function that plans for, develops,
implements, and maintains IS hardware, software, and the portfolio of applications that
people use to support the goals of an organization
oInformation systems (IS) – any computer-based tool that people use to work with
information and that supports the information and information-processing needs of an
oAn information system can be an important enabler of business success and innovation
oIS does not equal or represent business success and innovation, it is simply an enabler
of business success and innovation
oWill spending large amounts of money on IS guarantee automatic success?
oSpending large amounts of money on IS will not guarantee an organization
automatic success
oTo be successful, organizations need to allocate resources on the right types of
IS that correctly support their business operations
Management information systems (MIS) the function that plans for, develops, implements,
and maintains IS hardware, software, and applications that people use to support the goals of
an organization
oMIS is a business function, similar to Accounting, Finance, Operations, and Human
oMIS is not technology
oMost organizations have an IS department that is responsible for performing the MIS
oThis is similar to an organization having an Accounting department that is responsible for
performing the accounts payable and accounts receivable functions
IS Cultures
oInformation-Functional Culture - Employees use information as a means of exercising
influence or power over others. For example, a manager in sales refuses to share
information with marketing. This causes marketing to need the sales manager’s input
each time a new sales strategy is developed.
oInformation-Sharing Culture - Employees across departments trust each other to use
information (especially about problems and failures) to improve performance.
oInformation-Inquiring Culture - Employees across departments search for information
to better understand the future and align themselves with current trends and new
oInformation-Discovery Culture - Employees across departments are open to new
insights about crisis and radical changes and seek ways to create competitive
oWhich type of information culture will help an organization achieve the greatest success?
oInformation-discovery culture
oWhich type of information culture would hurt an organization?
oInformation-functional culture
oOrganizations that encourage their employees to share ideas and openly discuss
challenges and opportunities on an enterprise-wide level have a competitive
advantage over organizations that operate in functional silos
oThis point is easily demonstrated by looking back at the Apple case and how
many different people from different areas needed to be involved in the iPod
oApple even purchased an outside company, SoundStep, to help bring the iPod to
Information System Roles and Responsibilities
oChief information officer (CIO)Oversees all uses of IT and ensures the strategic
alignment of IT with business goals and objectives
oChief knowledge officer (CKO) - Responsible for collecting, maintaining, and
distributing the organization’s knowledge
oChief privacy officer (CPO) – Responsible for ensuring the ethical and legal use of
oChief security officer (CSO) – Responsible for ensuring the safety of IT resources
including data, hardware, software, and people
oChief technology officer (CTO) – Responsible for ensuring the throughput, speed,
accuracy, availability, and reliability of IT
Identifying Competitive Advantage
oTo survive and thrive an organization must create a 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
oOrganizations watch their competition through environmental scanning
Environmental scanning – the acquisition and analysis of events and trends in
the environment external to an organization
Three common tools used in industry to analyze and develop competitive
advantages include:
Porter’s Five Forces Model
Porter’s three generic strategies
Value chains