Monday, 22 July 2013


Organizational Information

«  Information is everywhere in an organization.
«  Employees must be able to obtain and analyze the many different levels, 
      formats, and granularities of organizational information to make decisions.
«  Successfully collecting, compiling, sorting, and analyzing information can
      provide tremendous insight into how an organization is performing.
«  Information granularity –refers to the extent of detail within the
       information (fine and detailed or coarse and abstract)

«  Levels, formats, and granularities of organizational information

« Transactional Information

Analytical Information

The Value of Timely Information

«  Timeliness is an aspect of information that depends on the situation
§  Real-time information : Immediate, up-to-date information
§  Real-time system : Provides real-time information in response to
                                          query requests

The Value of Quality Information

«  Business decisions are only as good as the quality of the information
      used to make the decisions.
«  You never want to find yourself using technology to help you make a bad
      decision faster.


Organizational Structures

·         Organizational employees must work closely together to
   develop strategic initiatives that create competitive
·         Ethics and security are two fundamental building blocks that
   organizations must base their businesses upon

IT Roles and Responsibilities

·         Information technology is a relatively new functional
   area,having only been around formally for around 40 years.
·         Recent IT-related strategic positions:
     -          Chief Information Officer (CIO)
     -          Chief Technology Officer (CTO)
     -          Chief Security Officer (CSO)
     -          Chief Privacy Officer (CPO)
     -          Chief Knowledge Office (CKO)

The Gap between Business Personnel and IT Personnel

·         Business personnel possess expertise in functional areas such
   as marketing, accounting, and sales.
·         IT personnel have the technological expertise.
·         This typically causes a communications gap between the
   business personnel and IT personnel.

Improving Communications

·         Business personnel possess expertise in functional areas
   such as marketing, accounting, and sales.
·         IT personnel have the technological expertise.
·         This typically causes a communications gap between the
   business personnel and IT personnel.

Organizational Fundamentals. Ethics and Security

·         Ethics and security are two fundamental building blocks
   that organizations must base their businesses on to be
·         In recent years, such events as the Enron and Martha Stewart,
   along with 9/11 have shed new light on the meaning of ethics
   and security.


·         Ethics–the principles and standards that guide our behavior
   toward other people.
·         Privacy is a major ethical issue
   –Privacy; The right to be left alone when you want to be,
              to have control over your own personal
              possessions,and not to be observed without your

·         Issues affected by technology advances
-          Intellectual property
-          Copyright
-          Fair use doctrine
-          Pirated software
-          Counterfeit software


·         Organizational information is intellectual capital
         - it must be protected.
·         Information security–the protection of information from
                     accidental or intentional misuse by persons
                     inside or outside an organization.
·         E-business automatically creates tremendous information
   security risks for organizations

Saturday, 13 July 2013



        Key performance indicator – measures that are tied to
 business drivers.
        Metrics are detailed measures that feed KPIs.
        Performance metrics fall into the nebulous area of business
 intelligence that is neither technology, nor business centered,
 but requires input from both IT and business professionals.

Efficiency and Effectiveness

«  Efficiency IT metric – Measures the performance of the IT system itself including throughput, speed, and availability.

«  Effectiveness IT metric – Measures the impact IT has on business processes and activities including customer satisfaction, conversion rates, and sell-through increases.

Benchmarking –Baselining Metrics

«  Regardless of what is measured, how it is measured, and whether it is for the
sake of efficiency or effectiveness, there must be benchmarks – 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.

The Interrelationships of Efficiency and Effectiveness IT Metrics

•Efficiency IT metrics focus on technology and include:

– Throughput
– Transaction speed
– System availability
– Information accuracy
– Web traffic
– Response time

The Interrelationships of Efficiency and Effectiveness IT Metrics

Effectiveness IT metrics focus on an organization’s
goals, strategies, and objectives and include:

– Usability
– Customer satisfaction
– Conversion rates
– Financial

The Interrelationships of Efficiency and Effectiveness IT Metrics

§  Security is an issue for any organization offering products or services over the Internet
§  It is inefficient for an organization to implement Internet security, since it slows down processing
§  However, to be effective it must implement Internet security
§  Secure Internet connections must offer encryption and Secure Sockets Layers (SSL denoted by the lock symbol in the lower right corner of a browser)

Metrics for Strategic Initiatives

•Metrics for measuring and managing strategic initiatives

– Web site metrics
– Supply chain management (SCM) metrics
– Customer relationship management (CRM) metrics
– Business process reengineering (BPR) metrics
– Enterprise resource planning (ERP) metrics


•Web site metrics include:

– Abandoned registrations
– Abandoned shopping cards
– Click-through
– Conversion rate
– Cost-per-thousand
– Page exposures
– Total hits
– Unique visitors


• Back order
• Customer order promised cycle time
• Customer order actual cycle time
• Inventory replenishment cycle time
• Inventory turns (inventory turnover)


• Customer relationship management metrics measure user satisfaction and interaction and include;

    Sales metrics
    Service metrics  
    Marketing metrics


•The balanced scorecard enables organizations to measure
and manage strategic initiatives

Wednesday, 10 July 2013


Strategic initiative

Organizations can undertake high-profile strategic initiatives including:
        Supply chain management (SCM)
        Customer relationship management (CRM)
        Business process reengineering (BPR)
        Enterprise resource planning (ERP)

Supply Chain Management (SCM)

·         Involves the management of information flows between and among
      stages in a supply chain to maximize total supply chain effectiveness
      and profitability

Four basic components of supply chain management include:

              i.            Supply chain strategy – Strategy for managing all resources to meet customer demand
            ii.            Supply chain partner – Partners throughout the supply chain that deliver finished  products, raw materials, and services.
          iii.            Supply chain operation – Schedule for production activities
          iv.            Supply chain logistics  – Product delivery process

Effective and efficient SCM systems can enable an organization to:

·         Decrease the power of its buyers.
·         Increase its own supplier power.
·         Increase switching costs to reduce the threat of substitute products or
·         Create entry barriers thereby reducing the threat of new entrants.
·         Increase efficiencies while seeking a competitive advantage through cost

Effective and efficient SCM systems effect on Porter’s Five Forces

Customer Relationship Management (CRM)

·         Involves managing all aspects of a customer’s relationship with an
        organization to increase customer loyalty and retention and an
        organization's profitability.
·         Many organizations, such as Charles Schwab and Kaiser Permanente,
        have obtained great success through the implementation of CRM
·         CRM is not just technology, but a strategy, process, and business goal
         that an organization must embrace on an enterprise wide level.
·         CRM can enable an organization to:

 ü  Identify types of customers
 ü  Design individual customer marketing campaigns
 ü  Treat each customer as an individual
  ü  Understand customer buying behaviors

Business Process Reengineering (BPR)

Ø  Business process
·         A standardized set of activities that accomplish a specific task, such as processing a customer’s order.

Ø Business process re-engineering (BPR)
·        The analysis and redesign of workflow within and between enterprises.
·         The purpose of BPR is to make all business processes best-in-class.
·         Types of change an organization can achieve, along with the magnitudes
        of change and the potential business benefit.


1)      Organize around outcomes, not tasks.
2)      Identify all the organization’s process and prioritize then in order of
        redesign urgency.
3)     Integrate information processing work into the real work that produces
        the information.
4)     Treat geographically dispersed resources as though they were
5)     Link parallel activities in the workflow instead of just integrating their
6)     Put the decision point where the work is performed, and build control
        into process.
7)     Capture information once and at the source.

Finding opportunity using BPR

·         A company can improve the way it travels the road by moving from foot
         to horse and then horse to car.
·         BPR looks at taking a different path, such as an airplane which ignore the
         road completely.
·         Progressive Insurance Mobile Claims Process.
·         Types of change an organization can achieve, along with the magnitudes
         of change and the potential business benefit.

Pitfalls of BPR

        Fails to keep up with competitors

Enterprise Resource Planning

Enterprise resource planning (ERP)

·         Integrates all departments and functions throughout an organization
         into a single IT system
·       So that employees can make decisions by viewing enterprise wide
         information on all business
·         Keyword in ERP is “enterprise”.
·         Data from a sales database.
·         Data from an accounting database.
·         ERP systems collect data from across an organization and correlates.
·         The data generating an enterprise wide view.


What is competitive advantage?

A product or service that an organization’s place a greater value on than similar offering from competitor.

Buyer power

v  High when people have many choice of whom to buy
v  Low when choice are few
v  To reduce buyer power an organization must make it more attractive to
     buy from the company
v  Best practice of IT

The competitive environment

§  Customers can grow large and powerful as a result of their market share.
§  Many choices of whom to buy from. Low when comes to limited items.
o   Example, used loyalty programs like Jusco card.


Ø  When buyers have few choices of whom to buy from
Ø  When their choices are many

Threat of substitute product & service

v  High when there are many alternative to a product or service
v  Low when there are few alternatives from which to choose
v  The treat of substitute
v  Customer can use different product to fulfill the same need.

  •      Example: electronic product
v  Switching cost : cost can make customer reluctant to switch product or

Treat of new entrants

v  High when it is easy for new competitors to enter a market
v  Low when there are significant entry barriers to entering a market
v  Entry barriers  is a product or service feature that customers have come to
    expect from organization and must be offered by entering organization to
    compete and survive

Competitive environment

v  The treats of new entrants’ forces top management to monitor the trends,
    especially in technology, that might give rise to new competitors
o   Example : new bank, online paying bills, account monitoring

Rivalry among existence competitors

§  High when competition is fierce in a market
§  Low  when competition is more complacent

Rivalry among existing firms

§  Existing competitors are not much of the treat. Typically each firm has found
   its niche
§  Change in management the rules of the game rise to serious threats

The three generics strategies

Cost leadership (Low cost)

§  Becoming a low cost producer in the industry allows the company to lower
  prices to customers
§  Competitors with higher costs cannot afford to compete with the low cost
  leader on price

Differentiation (High cost)

§  Create competitive advantage by distinguishing their product on one or
  more features important to their customers
§  Unique features or benefits may justify price differences and/or stimulate

Focused strategy (Narrow market)

ØTarget to a niche market
Ø  Concentrates on either cost leadership or differentiation