CHAPTER 7 : STORING ORGANIZATIONAL INFORMATION - DATABASES

Relational Database Fundamentals 

• database maintains information about various type of object (inventory), events (transactions), people (employees), and places (ware-house).
• In hierarchical database model, information is organized into a tree-like structure that allows repeating information using parent/child relationships in such a way that it cannot have too many relationships
• the network database model is a flexible way of representing objects and their relationships.
• the relational database model is a type of database that stores information in the form of logically related two-dimensional tables.

Entities and Attributes

• entity in the relational database model is a person,place,thing,transaction, or events about which information is stored.
• attributes also called fields or columns , are characteristics or properties of an entity class. 

Keys and Relationships

•  a primary key is a fields (or group of fields) that uniquely identifies a given entity in the table.
• a foreign key in the relational database model is a primary key of one table that appears as an attribute in another table and acts to provide a logical relationship between the two tables.

relational database advantages

• increased flexibility 
• increased scalability and performance
• reduced information redundancy
• increased information integrity (quality)
• increased information security

Increased Flexibility

• database tends to mirror business structures, and a good database can handle changes quickly and easily, just as any good business need to be able to handle changes quickly and easily
• the physical view of information deals with the physical storage of information on a storage device such as hard disk.
• logical view of information focuses on how users logically access information to meet their particular business needs.

Increased scalability and performance

• scalability refers to how well system can adapt to increased demands.
• performance measure how quickly system performs a certain process or transaction.

Reduced information redundancy

• redundancy is the duplication of information, or storing the same information in multiple places.
• redundant information occurs because organizations frequently capture and store the same information in multiple location.

Increased information integrity (quality)

• information integrity is a measure of the quality of information.
• integrity constraints are rules that help ensure the quality of information.
• relational integrity constraints are rules that enforces basic and fundamental information-based constraints.
• business-critical integrity constraints enforce business rules vital to an organization's success and often require more insight and knowledge than relational integrity constraints.

database management system (DBMS)

• DBMS is software through which users and application programs interact with a database.

data driven websites

• data driven websites is an interactive website kept constantly update and relevant to the needs of its customers through the use of a database.

integrating information among multiple databases

• integration allows separate system to communicate directly with each other.
• forward integration takes information entered into a given system and send it automatically to all downstream systems and processes.
• a backward integration takes information entered into a given system and send it automatically to upstream system and process. 

 

 

CHAPTER 6

VALUING ORGANIZATIONAL INFORMATION

ORGANIZATIONAL INFORMATION

• information is everywhere in an organisation

• employees must be able to obtain and analyse the many different levels, formats, and granularity of organisational information to make decisions

• successfully collecting, compiling, sorting, and analysis information can provide tremendous insight into how an organisation is performing

• levels. format, any granularity of organisational information





THE VALUE OF TRANSACTIONAL AND ANALYTICAL INFORMATION

• transactional information encompasses all of the information contained within as single business process or unit of work, and its primary purpose is to support the performing of daily operational tasks

• analytical information encompasses all organizational information, and its primary purpose is to support performing of managerial analysis tasks


THE VALUE OF TIMELY INFORMATION

• timeliness is an aspect of information that depends on the situation

• Real-time-information means 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

• characteristics of high-quality information include:

• accuracy

• completeness

• consistency

• uniqueness

• timeliness

UNDERSTANDING THE COSTS OF POOR INFORMATION

• The four primary sources of low quality information include:

• online customers intentionally enter inaccurate information to protect their privacy
• information from different systems have different entry standards and formats 
• call center operators enter abbreviated or erroneous information by accident or to save time
• third party and external information contains inconsistencies, inaccuracies, and errors

• potential business effects resulting from low quality information include:

• inability to accurately track customers 

• difficulty identifying valuable customers 

• inability to identifying selling opportunities 

• marketing to nonexistent customers 

• difficulty tracking revenue due to inaccurate invoice 

• inability to build strong customer relationships

UNDERSTANDING THE BENEFITS OF GOOD INFORMATION

• high quality information can significantly improve the chances of making a good decision

• good decisions can directly impact an organisation's bottom line

CHAPTER 5

ORGANISATIONAL STRUCTURES THAT SUPPORT STRATEGIC INITIATIVES

ORGANISATIONAL STRUCTURES

• organisational employees must work closely together to develop strategic initiatives that create competitive advantages

• ethics and security are two fundamental building blocks that organisations must base their business 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) is oversees all uses of IT and ensures the strategic alignment of IT business goals and objectives

> Chief Technology Officer (CTO) is responsible for ensuring the throughput, speed, accuracy, availability, and reliability of an organization's information technology

> Chief Security Officer (CSO) is responsible for ensuring the ethical and legal use of information within an organization

> Chief Knowledge Office (CKO) is responsible for collecting, maintaining, and distributing the organisation's knowledge

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 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

ORGANIZATIONAL FUNDAMENTALS - ETHICS AND SECURITY

• ethics and security are two fundamental building blocks that organisations must base their businesses on to be successful

• in recent years, such events as the Enron and Martha Stewart, along with 9/11 have shed new light n the meaning of ethics and security

Ethics

• the principles and standards that guide our behavior toward other people

• privacy is a major ethical issue. 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 consent

• issues affected by technology advances

• intellectual property - intangible creative work that is embodied in physical form

• copyright - the legal protection afforded an expression of an idea, such as a song, video game, and some types of proprietary documents

• fair use doctrine - in certain situations,it is legal to use copyright material

• pirated softwarebcounterfeit software - software that is manufactured to look like the real thing and sold as such

• one of the main ingredients in trust is privacy

• primary reasons privacy issues lost trust for e-business

• loss personal privacy is atop concern for american in the 21st century

• among Internet user, 37 percent would be "a lot" more inclined to purchase a product on a Web site that had a privacy policy

• privacy/security is the number one factor that would convert internet researchers into Internet buyers

Security

• organization information is intellectual capital - it must be protected

• information security - the protection of information from accidental or intentional misuse by person inside or outside an organization

• E-business automatically creates tremendous information security risks for organizations 

CHAPTER 4 > Measuring the Success of Strategic Initiatives

Efficiency and Effectiveness

• Efficiency IT metrics measure the performances of the IT system itself including throughput ,speed and availability.

• Effectiveness IT metrics measure the impacts IT has on business processes and activities including customer satisfaction, conversion rates, and sell-trough increase.

> doing thing right addresses efficiency - getting the most from the most resources.

> doing the right things addresses effectiveness - setting the right goals and objectives and ensuring they are      accomplish.

Benchmarking - Baseline Metrics

• benchmarking is 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.

• Throughput - The amount of information that can travel through a system at any point.
• Transaction speed - The amount of time a system takes to performs transaction.
• System Availability - The number of hours a system is available for users.
• Information Accuracy - The extent to which a system generates the correct results when executing the same transaction numerous times.
• Web Traffic - Includes a host of benchmarks such as the number of page views, the number of unique visitors, and the average time spent viewing a web page.
• Response Time - The time takes to respond to user interactions such as a mouse click.
• Usability - The ease with which people perform transaction or find information. A popular usability metric on the internet is degrees of freedom, which measure the number of clicks required to find desired information.
•  Customer Satisfaction - Measured by such benchmarks as satisfaction surveys, percentages of existing customer retained, increases in revenue dollars per customer.
• Conversion Rates - the number of customers an organization "touches" for the first time and persuade to purchase its products or services. this is a popular metric for evaluating the effectiveness of banner, pop-up, and pop-under ads on the Internet
• Financial -  Such as return on investment (the earning power of an organization's assets), cost- benefits analysis (the comparison of projected revenue and costs including development, maintenance, constant revenues equal ongoing costs).  

METRICS FOR STRATEGIC INITIATIVES

· metrics for measuring and managing strategic initiatives include:

·web site metrics

· supply chain management (SCM) metrics

· customer relationship management (CRM) metrics

·business process re engineering (BPR)

· enterprise resource planning (ERP) metrics

WEBSITE METRICS

·abandoned registrations

*   number of visitors who start the process of completing a registration page and then abandon the activity.

·abandoned shopping cards

*  number of visitors who create a shopping card and start shopping and then abandon the activity before paying for the merchandise.

·  click - through

* count of the number of people who visit a site, click on an ad, and are taken to the site of the advertiser.

·conversation rate

*   percentage of potential customers who visit a site and actually buy something.

·cost-per-thousand (CPM)

* sales dollars generated per dollar of advertising. this is commonly used to make the case for spending money to appear on a search engine.

· page exposures

*  average number of page exposures to an individual visitor.

·   total hits

*  number of visits to a web site, many of which may be by the same visitor.

·  unique visitors

*  number of unique visitors to a site in a given time. this is commonly used by Nielsen/Net ratings to rank the most popular Web sites.

SUPPLY CHAIN MANAGEMENT METRICS

· back order

* an unfilled customer order. A back order is demand (immediate or past due) against an item whose current stock level is insufficient to satisfy demand.

· customer order promised cycle time

*  the anticipated or agreed upon cycle time of a purchase order. it is a gap between the purchase order creation date and the requested delivery date.

·   customer order actual cycle time

*  the average time it takes toi actually fill a customer's purchase order. This measure can be viewed on an order or an order line level.

·    inventory replenishment cycle time

*   measure of the manufacturing cycle time plus the time included to deploy the product to the appropriate distribution center.

·     inventory turns (inventory turnover)

*   the number of times that a company's inventory cycles or turns over per year. it is one of the most commonly used supply chain metrics.

CUSTOMER RELATIONSHIP MANAGEMENT METRICS

· customer relationships management metrics measure user satisfaction and interaction        

BUSINESS PROCESS RE ENGINEERING AND ENTERPRISE RESOURCE PLANNING METRICS

·   the balanced scorecard enables organizations to measure and manage strategic initiatives

     

CHAPTER 3 - STRATEGIC INITIATIVES FOR IMPLEMENTING COMPETITIVE ADVANTAGES

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 :

• supply chain strategic - strategic for managing all resources to meet customer demand

• supply chain partner - partners throughout the supply chain that deliver finished product, raw materials and services.   

• supply chain operation -  schedule for production activities  

• supply chain logistics -  product delivery process

• Effective and efficient SCM system 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 product or services 

•  create entry barriers thereby reducing the threat of new entrants 

•  increase efficiency while seeking a competitive advantage through cost leadership.

Customer relationship management (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 : 

• identify types of customers  

•  design individual customer marketing campaigns 

•  treat each customers as an individual 

•  understand customer buying behaviors.

Business process reengineering (BPR)

• business process -  a standardized set of activities that accomplish a specific task such as processing a customer's order.
• business process reengineering (BPR) - the analysis and redesign of workflow within and between enterprise

• the purpose of BPR is to make all business processes best-in-class 

Seven principle of BPR 

1. organize around outcomes, not tasks.
2. identify all the organization's processes and prioritize them 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 centralized
5. link parallel activities in the workflow instead of just integrating their results
6. put the decision point where the work is performed, and build control into the process
7. capture information once and at the sources.

Finding opportunity using BPR  

• A company can improve the way it travels the roads 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 .
• types of change an organization can achieve, along with the magnitudes of change and the potential business benefit.

Enterprise resource planning (ERP)

• integrates all department and functions throughout an organization into a single IT system so that employees can make decisions by viewing enterprise wide information on all business operations.
• keyword in ERP is "enterprise"
• ERP system collect data from across an organization and correlates the data generating an enterprise wide view.

Chapter 2 - Identifying Competitive Advantages

A competitive advantages is a feature of a product or service on which customers place greater value than they do on similar offering from competitors.
Competitive advantages provide the same product or service either at lower price or with additional value that can fetch premium prices.

Competitive intelligence is the process of gathering information about the competitive environment, including competitor's plans, activities, and products, to improve a company's ability to succeed.
It is mean that understanding and learning as much as possible as soon as possible about what is occurring outside the company to remain competitive.

Common tools to analyze competitive intelligence and develop competitive advantage :

• The Five Force Model (for evaluating industry attractiveness)
• The Three Generic Strategies (for choosing a business focus)
• Value Chain Analysis (for executing business strategies) 

THE FIVE FORCE MODEL

1. Buyer Power

• High - when buyers have many choices of whom to buy
• Low - when their choices are few
• To reduce buyer power (and create competitive advantage), an organization must make it more attractive to buy from the company not from the competitors.
• Best practices of IT based - 

• Loyalty program in travel industry (e.g. rewards on free airline tickets or hotel stays) 

2. Supplier Power

• High - when buyers have few choices of whom to buy from
• Low - when their choices are many

• best practices of IT to create competitive advantages.
• E.g B2B marketplace - private exchange allow a single buyer to posts it needs and then open the bidding to any supplier who would care to bid. Reverse auction is an auction format in which increasingly lower bids.

3. Threat of substitute products & services

• High - when there are many alternatives to a product or service.
• Low - when there are few alternatives from which to choose.
• Ideally, an organization would like to be on a market in which there are few substitutes of their product or services.

• best practices of IT 
• E.g. Electronic product - same function different brand

4. Threat of new entrants 

• High - when it is easy for new competitors to enter a market.
• Low - when there are significant entry barriers to entering a market.
•  Entry barriers is a product or services features that customers have come to expect from organizations and must be offered by entering organization to compete and survive.
• Best practices of IT

• E.g. new bank must offers online paying bills, acc monitoring to compete.

5. Rivalry among existence competitors

•  High- when competition is fierce in a market
• Low- when competition is more complacent
• Best practice of IT 

• Wal-mart and its suppliers using IT-enabled system for communication and track product at aisles by effective tagging system 
• Reduce cost by using effective supply chain 

The three generic strategies

1. cost leadership

• 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-costs leader on price

2. Differentiation

• 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 demand.
• Ex: i-care by Proton

3. Focused strategy

• Target to a niche market
• concentrates on either cost leadership or differentiation

The value Chains -  Targeting Business Processes

 

* supply chain- a chain or series of processes that adds value to product and service for customer

* Add value to its products and services that support a profit margin for the firm

Chapter 1 : Business Driven Technology

  
Information technology (IT)

• Is a concerned with the use of technology in managing and processing information.

• IT is an important enabler of business success and innovation

Management information systems (MIS)

•  A general name for the business function and academic discipline covering the application of the people, technologies, and procedures to solve business problem.

• MIS is a business function, similar to Accounting, Finance, Operation, and Human Resources.

When beginning to learn about information technology it is important to understand :

• Data, information, and business intelligence

• IT resources

• IT cultures

Information 

• Data - Raw facts that describe the characteristic of an event.
• Information - data converted into a meaningful and useful context
• Business intelligence - applications and technologies that are used to support decision-making efforts 

IT RESOURCES 

•   People use
• Information technology to work with
• Information

 

IT CULTURES

 Organizational information cultures includes : 

• Information - Function 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.
• Information - Sharing Culture - Employees across departments trust each other to use information (especially about problems and failures) to improve performance.
• Information - Inquiring Culture - Employees across departments search for information to better understand the future and align themselves with current trends and new directions
• Information - Discovery Culture - Employees across department are open to new insights about crisis and radical competitive advantages