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Instructor Ch 01

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Education

Published on January 28, 2008

Author: Paola

Source: authorstream.com

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CHAPTER 1:  CHAPTER 1 INFORMATION SYSTEMS IN BUSINESS Opening Case Apple – Merging Technology, Business, and Entertainment Chapter One Overview:  Chapter One Overview SECTION 1.1 – INFORMATION SYSTEMS IN BUSINESS Information Technology’s Role in Business Information Technology Basics Roles and Responsibilities in Information Technology Measuring Information Technology’s Success SECTION 1.2 – BUSINESS STRATEGY Identifying Competitive Advantages The Five Forces Model – Evaluating Business Segments The Three Generic Strategies – Creating a Business Focus Value Chain Analysis – Targeting Business Processes SECTION 1.1:  SECTION 1.1 INFORMATION SYSTEMS IN BUSINESS LEARNING OUTCOMES:  LEARNING OUTCOMES Describe the functional areas of a business and why they must work together for the business to be successful Explain information technology’s role in business and how you measure success Compare management information systems (MIS) and information technology (IT) and define the relationships among people, information technology, and information LEARNING OUTCOMES:  LEARNING OUTCOMES Compare the responsibilities of a chief information officer (CIO), chief technology officer (CTO), chief security officer (CSO), chief privacy officer (CPO), and chief knowledge officer (CKO) Explain the gap between IT and the business, along with the primary reason this gap exists INFORMATION TECHNOLOGY’S ROLE IN BUSINESS:  INFORMATION TECHNOLOGY’S ROLE IN BUSINESS Information technology is everywhere in business Information Technology’s Impact on Business Operations:  Information Technology’s Impact on Business Operations Information Technology’s Impact on Business Operations:  Information Technology’s Impact on Business Operations Information Technology’s Impact on Business Operations:  Information Technology’s Impact on Business Operations Information Technology’s Impact on Business Operations:  Information Technology’s Impact on Business Operations Organizations typically operate by functional areas or functional silos Functional areas are interdependent INFORMATION TECHNOLOGY BASICS:  INFORMATION TECHNOLOGY BASICS Information technology (IT) – any computer-based tool that people use to work with information and support the information and information-processing needs of an organization Information technology is an important enabler of business success and innovation INFORMATION TECHNOLOGY BASICS:  INFORMATION TECHNOLOGY BASICS Management information systems (MIS) – the function that plans for, develops, implements, and maintains IT hardware, software, and applications that people use to support the goals of an organization MIS is a business function, similar to Accounting, Finance, Operations, and Human Resources INFORMATION TECHNOLOGY BASICS:  INFORMATION TECHNOLOGY BASICS When beginning to learn about information technology it is important to understand the following: Information IT resources IT cultures Information :  Information Data - raw facts that describe the characteristic of an event Information - data converted into a meaningful and useful context IT Resources:  IT Resources People use Information technology to work with Information IT Cultures:  IT Cultures Organizational information cultures include: Information-functional culture Information-sharing culture Information-inquiring culture Information-discovery culture ROLES AND RESPONSIBILITIES IN IT:  ROLES AND RESPONSIBILITIES IN IT Information technology is a relatively new functional area, having only been around formally for around 40 years Recent IT strategic positions include: Chief Information Officer (CIO) Chief Technology Officer (CTO) Chief Security Officer (CSO) Chief Privacy Officer (CPO) Chief Knowledge Office (CKO) ROLES AND RESPONSIBILITIES IN IT:  ROLES AND RESPONSIBILITIES IN IT Chief Information Officer (CIO) – oversees all uses of IT and ensures the strategic alignment of IT with business goals and objectives Broad CIO functions include: Manager – ensuring the delivery of all IT projects, on time and within budget Leader – ensuring the strategic vision of IT is in line with the strategic vision of the organization Communicator – building and maintaining strong executive relationships ROLES AND RESPONSIBILITIES IN IT:  ROLES AND RESPONSIBILITIES IN IT Average CIO compensation by industry ROLES AND RESPONSIBILITIES IN IT:  ROLES AND RESPONSIBILITIES IN IT What concerns CIOs the most ROLES AND RESPONSIBILITIES IN IT:  ROLES AND RESPONSIBILITIES IN IT Chief Technology Officer (CTO) – responsible for ensuring the throughput, speed, accuracy, availability, and reliability of IT Chief Security Officer (CSO) – responsible for ensuring the security of IT systems Chief Privacy Officer (CPO) – responsible for ensuring the ethical and legal use of information Chief Knowledge Office (CKO) - responsible for collecting, maintaining, and distributing the organization’s knowledge ROLES AND RESPONSIBILITIES IN IT:  ROLES AND RESPONSIBILITIES IN IT Skills pivotal for success in executive IT roles The Gap Between Business Personnel and IT Personnel :  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:  Improving Communications Business personnel must seek to increase their understanding of IT IT personnel must seek to increase their understanding of the business It is the responsibility of the CIO to ensure effective communication between business personnel and IT personnel MEASURING INFORMATION TECHNOLOGY’S SUCCESS:  MEASURING INFORMATION TECHNOLOGY’S SUCCESS Key performance indicator (KPI) – 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 Metrics:  Efficiency and Effectiveness Metrics 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:  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 Benchmarking – Baselining Metrics:  Benchmarking – Baselining Metrics E-governement benchmarks The Interrelationships of Efficiency and Effectiveness IT Metrics:  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:  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:  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) The Interrelationships of Efficiency and Effectiveness IT Metrics:  The Interrelationships of Efficiency and Effectiveness IT Metrics OPENING CASE QUESTIONS Apple - Merging Technology, Business and Entertainment:  OPENING CASE QUESTIONS Apple - Merging Technology, Business and Entertainment What might have happened to Apple if its top executives had not supported investment in iPods? Formulate a strategy for how Apple can use efficiency IT metrics to improve its business Formulate a strategy for how Apple can use effectiveness IT metrics to improve its business Why would it be unethical for Apple to sell its iTunes customer information to other businesses? Evaluate the effects on Apple’s business if it failed to secure its customer’s information and it was accidentally posted to an anonymous Web site SECTION 1.2:  SECTION 1.2 BUSINESS STRATEGY LEARNING OUTCOMES:  LEARNING OUTCOMES Explain why competitive advantages are typically temporary List and describe each of the five forces in Porter’s Five Forces Model Compare Porter’s three generic strategies Describe the relationship between business processes and value chains IDENTIFYING COMPETITIVE ADVANTAGES:  IDENTIFYING COMPETITIVE ADVANTAGES To 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 IDENTIFYING COMPETITIVE ADVANTAGES:  IDENTIFYING COMPETITIVE ADVANTAGES Organizations 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 THE FIVE FORCES MODEL – EVALUATING BUSINESS SEGMENTS:  THE FIVE FORCES MODEL – EVALUATING BUSINESS SEGMENTS Porter’s Five Forces Model determines the relative attractiveness of an industry Buyer Power:  Buyer Power Buyer power – high when buyers have many choices of whom to buy from and low when their choices are few One way to reduce buyer power is through loyalty programs Loyalty program – rewards customers based on the amount of business they do with a particular organization Supplier Power:  Supplier Power Supplier power – high when buyers have few choices of whom to buy from and low when their choices are many Supply chain – consists of all parties involved in the procurement of a product or raw material Supplier Power:  Supplier Power Organizations that are buying goods and services in the supply chain can create a competitive advantage by locating alternative supply sources (decreasing supplier power) through B2B marketplaces Business-to-Business (B2B) marketplace – an Internet-based service that brings together many buyers and sellers Supplier Power:  Supplier Power Two types of business-to-business (B2B) marketplaces Private exchange – a single buyer posts its needs and then opens the bidding to any supplier who would care to bid Reverse auction – an auction format in which increasingly lower bids are solicited from organizations willing to supply the desired product or service at an increasingly lower price Threat of Substitute Products or Services:  Threat of Substitute Products or Services Threat of substitute products or services – high when there are many alternatives to a product or service and low when there are few alternatives from which to choose Switching cost – costs that can make customers reluctant to switch to another product or service Threat of New Entrants:  Threat of New Entrants Threat of new entrants – high when it is easy for new competitors to enter a market and low when there are significant entry barriers to entering a market Entry barrier – a product or service feature that customers have come to expect from organizations in a particular industry and must be offered by an entering organization to compete and survive Rivalry Among Existing Competitors:  Rivalry Among Existing Competitors Rivalry among existing competitors – high when competition is fierce in a market and low when competition is more complacent Although competition is always more intense in some industries than in others, the overall trend is toward increased competition in just about every industry THE THREE GENERIC STRATEGIES – CREATING A BUSINESS FOCUS:  THE THREE GENERIC STRATEGIES – CREATING A BUSINESS FOCUS Organizations typically follow one of Porter’s three generic strategies when entering a new market Broad cost leadership Broad differentiation Focused strategy THE THREE GENERIC STRATEGIES – CREATING A BUSINESS FOCUS:  THE THREE GENERIC STRATEGIES – CREATING A BUSINESS FOCUS Value Creation:  Value Creation Once an organization chooses its strategy, it can use tools such as the value chain to determine the success or failure of its chosen strategy Business process – a standardized set of activities that accomplish a specific task, such as processing a customer’s order Value chain – views an organization as a series of processes, each of which adds value to the product or service for each customer Value Creation:  Value Creation Value Chain Value Creation:  Value Creation Value chains with Porter’s Five Forces OPENING CASE QUESTIONS Apple - Merging Technology, Business and Entertainment:  OPENING CASE QUESTIONS Apple - Merging Technology, Business and Entertainment Did Apple gain a competitive advantage from its decision to invest in an online music business? How can Apple use environmental scanning to gain business intelligence? Using Porter’s Five Force Model, analyze Apple’s buyer power and supplier power Which of the three generic strategies is Apple following? Which of Porter’s Five Forces did Apple address through its introduction of the iPod? CLOSING CASE ONE Say “Charge It” with Your Cell Phone:  CLOSING CASE ONE Say “Charge It” with Your Cell Phone Do you view this technology as a potential threat to traditional telephone companies? If so, what counterstrategies could traditional telephone companies adopt to prepare for this technology? Using Porter’s Five Forces describe the barriers to entry for this new technology CLOSING CASE ONE Say “Charge It” with Your Cell Phone:  CLOSING CASE ONE Say “Charge It” with Your Cell Phone Which of Porter’s three generic strategies is this new technology following? Describe the value chain of using cell phones as a payment method What types of regulatory issues might occur due to this type of technology? CLOSING CASE TWO Innovative Business Managers:  CLOSING CASE TWO Innovative Business Managers Choose one of the companies listed above and explain how it could use a CIO, CTO, and CPO to improve business Why is it important for all of DreamWorks’ functional business areas to work together? Provide an example of what might happen if the DreamWorks marketing department failed to work with its sales department Why is information technology important to an organization like the Boston Red Sox? Every organization needs information to remain CLOSING CASE TWO Innovative Business Managers:  CLOSING CASE TWO Innovative Business Managers Which of Porter’s Five Forces is most important to Home Depot’s business? Which of the three generic strategies is PepsiCo following? Explain the value chain and how a company like GE can use it to improve operations CLOSING CASE THREE The World is Flat – Thomas Friedman:  CLOSING CASE THREE The World is Flat – Thomas Friedman Do you agree or disagree with Friedman’s assessment that the world is flat? Be sure to justify your answer What are the potential impacts of a flat world for a student performing a job search? What can students do to prepare themselves for competing in a flat world? Identify a current flattener not mentioned on Friedman’s list

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