AFM241 Chapter Notes - Chapter 1: Technology Company, Software As A Service, Information Technology Management

109 views7 pages
Ch. 1 IT Business Value (ITBV) Proposition
SUMMARY:
Innovation  Adoption  Spending  Payoffs
News Based Context & Perspective
- Increase sales  lower cost  increase NPV
- Easy to measure costs; difficult to measure benefits – ignore IT risks that lessen benefits
- Does IT matter to Wall Street?
oMatters when systems and networks go publicly wrong
oCan make internal operations efficient for bottom-line results
1.1Introduction
Information Technology: development, maintenance, and use of computer systems, software,
and networks for the processing and distribution of data
Information Systems: combines technical and human activities within organization
Unlock document

This preview shows pages 1-2 of the document.
Unlock all 7 pages and 3 million more documents.

Already have an account? Log in
- The process of managing life cycle of organizational practices related to IT – designing,
developing, implementing, and operating
- A FIRM’s information system is the infrastructure for IT to deliver information and
communication to organization
Organizations use IT to capture, store, manipulate, and present data
Example: cash register (point of sales (POS) system) captures sales transactions. This updates
inventory management system to help manage stock and order goods when needed.
1.2IT Spending – Trends & Patterns
IT budget includes expenditures like staff salaries, training of staff and system users; upgrades
and replacements of telecomm, networking, and hardware; maintenance and development or
purchase of software apps; payments to vendors and services firms, and internet based costs.
Or can distinct between OPERATIONAL and CAPITAL EXPENDITURES
- Impt because IT spending is about status quo, new investments are about new
opportunities
- Operations = current IT infrastructure; CAPEX = new IT projects
Spending patterns:
1. Average IT spending across industries and over the years have been around 3%
2. Highest IT spending industries: Banking and Financial Services, Media and
Entertainment, Consulting and Business Services
a. Service industries higher (IT intensive industries)
3. Lowest IT spending industries: Metal and Natural Resources, Construction and
Engineering, and Automotive
4. IT spending in the IT industry relatively high – lower than banking though
5. Spending unusually high
1.3New Information Technology
Business or Data Analytics: use of large data sets and advanced statistical analysis to identify
the most profitable customers, select the best price, design the best supply chain routing, or
identify the best person to hire
Getting the data: (internally or externally)
- Internally
oLeveraging traditional sources such as POS (what they sell, price, when they
sell, etc.)
oFinancial health from accounting department
- User generated data
Unlock document

This preview shows pages 1-2 of the document.
Unlock all 7 pages and 3 million more documents.

Already have an account? Log in

Get access

Grade+
$10 USD/m
Billed $120 USD annually
Homework Help
Class Notes
Textbook Notes
40 Verified Answers
Study Guides
1 Booster Class
Class+
$8 USD/m
Billed $96 USD annually
Homework Help
Class Notes
Textbook Notes
30 Verified Answers
Study Guides
1 Booster Class