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MIS

Neusser Meppi German 51 cards

Strategic Alignment Model (PIC)

Cards in this deck (51)

  1. 1How are information systems transforming business and what is their relationship to globalization?Todays firms make huge investments in IS – how to invest this money wisely in ordert o be able to outperform competitors
    Technology has transformed business in the last decades
    Growing interdependence between ability to use information technology and ability to implement corporate strategies and achieve corporate goals
  2. 2Globalization and emergence and fully digitally firm ?Globalization, the development of technologies coupled with equally significant organizational redesign, have created the conditions for a fully digital firm.
    Organizations are trying to become more competitive and efficient by digitally enabling their core business processes and evolving into digital firms.
  3. 3Digital FirmKey corporate assets are managed through digital means, all of the organization’s significant business relationships in supply chain are digitally enabled and mediated. Core business processes are accomplished through digital networks
  4. 4Six strategic business objectivesBusiness firms invest heavily in IS to achieve six strategic business objectives:
    Operational excellence
    New products, services, and business models
    Customer and supplier intimacy
    Improved decision making
    Competitive advantage
    Survival
  5. 5Information technology (IT)Consists of all the hardware and software that a firm needs to use in order to achieve its business objectives.
  6. 6Information Systems (IS)An information system can be defined technically as a set of interrelated components that collect (or retrieve), process, store, and distribute information to support decision making and control in an organization.
  7. 7IS - What does it do ?Transforms raw data to useful information
    (Input-Processing-Output)
  8. 8Broader understanding of IS - Information systems literacyUsing information systems requires an understanding of the organization, management, and information technology shaping the systems
    Interaction between those 3 = IS Literacy Goal is how to optimize relationship between those 3
  9. 9OrganizationOrganization: have a structure that is composed of different levels and specialties, Senior Managem. - Strategic Decisions, Middle Managem.- Carry out S.M Decisions, Operational Managem. - Daily Operations
  10. 10ManagementManagement’s job is to make sense out of the many situations faced by organizations, make decisions, and formulate action plans to solve organiza- tional problems BUT they must also create new products and services and even re-create the organization from time to time
  11. 11TechnologyThe technology dimension consists of computer hardware, software, data management technology, and networking/telecommunications technology (including the Internet).
    Information technology is one of many tools managers use to cope with change.
  12. 12Business Perspective on ISManagers and business firms invest in IS because it is an instrument for creating value
    Investments in information technology will result in superior returns:
    Productivity increases
    Revenue increases
    Superior long-term strategic positioning
  13. 13Business Information Value Chain (BIVC)All business have BIVC: Raw data acquired and transformed through stages that add value to that information
    From a business perspective, information systems are part of a series of value-adding activities for acquiring, transforming, and distributing information that managers can use to improve decision making, enhance organizational performance, and, ultimately, increase firm profitability.
    The Business perspective calls attention to organizational and managerial nature of information systems
  14. 14Does Investment in IS guarantee good returns?Investing in information technology does not guarantee good returns, Considerable variation in the returns firms receive from systems investments
    Factors: Align IS with Strategy, Adopting the right business model that suits the new technologies, Information technology investments alone cannot make organizations and managers more effective unless they are accompanied by supportive values, structures, and behavior patterns in the organization and other complementary assets.
  15. 15How do IS impact Organizations? (Economic Impact)From the point of view of economics, IT changes both the relative costs of capital and the costs of information. Reduces nb of middle managers and clerical workers, Reduces Transactions Costs (Use of networks), Reduces Agency Costs (Easier access to information, facilities supervising)
  16. 16How do IS impact Organizations? (Organizational and Behavioral)IT Flattens Organizations: IT facilitates flattening of hierarchies, IT pushes decision-making rights lower in the organization because lower-level employees receive the information they need to make decisions without supervision, FASTER, Management costs decline as a percentage of revenues, and the hierarchy becomes much more efficient.
  17. 17Transformation of Competitive Environment (Technologies, Globalization)Analyzing the competitive environment (Porters 5 Forces) Transformation, destruction, threat to some industries (travel agency, newspaper) Competitive forces still at work, but rivalry more intense, Universal standards allow new rivals, entrants to market, New opportunities for building brands and loyal customer bases
    Question: How can the firm use information systems to counteract some of these forces?
  18. 18Using IS to achieve a Competitive Advantage (Porter)There are four generic strategies, each of which often is enabled by using information technol- ogy and systems: low-cost leadership (Walmart-inventory replenishment System), product differentiation (Google- Google Maps, Glasses), focus on market niche (Hilton Hotels), and strengthening customer and supplier intimacy.(Netflix, Amazon)
  19. 19Problems with the traditional file environmentProblems with the traditional file environment (files maintained separately by different departments), Data redundancy: Presence of duplicate data in multiple files, Data inconsistency:
    Same attribute has different values, Program-data dependence:
    When changes in program requires changes to data accessed by program, Lack of flexibility, Poor security, Lack of data sharing and availability
  20. 20Using Databases to Improve Business Performance and Decision MakingData warehouse: Stores current and historical data from many core operational transaction systems, Consolidates and standardizes information for use across enterprise, but data cannot be altered, Data warehouse system will provide query, analysis, and reporting tools
    Data marts: Subset of data warehouse
    Summarized or highly focused portion of firm’s data for use by specific population of users, Typically focuses on single subject or line of business
  21. 21Business Intelligence: Tools for Accessing InformationsBusiness Intelligence:
    Tools for consolidating, analyzing, and providing access to vast amounts of data to help users make better business decisions
  22. 22Business Intelligence: Tools include1. Software for database query and reporting, 2. Online analytical processing (OLAP) Supports multidimensional data analysis, Viewing data using multiple dimensions, 3.Data mining: More discovery driven than OLAP, Finds hidden patterns, relationships in large databases and infers rules to predict future behavior
  23. 23Improving Decision Making through IS- Types of DecisionsImproving hundreds of thousands of “small” decisions adds up to large annual value for the business
    Types of decisions: 1.Unstructured: SENIOR MANAGEMENT Decision maker must provide judgment, evaluation, and insight to solve problem
    2. Structured: OPERATIONAL MANAGEMENT Repetitive and routine; involve definite procedure for handling so they do not have to be treated each time as new 3. Semistructured: MIDDLE MANAGEMENT Only part of problem has clear-cut answer provided by accepted procedure
  24. 243 reasons why investments in IT do not always produce positive results1. Information quality: High-quality decisions require high-quality information
    2. Management filters: Managers have selective attention and have variety of biases that reject information that does not conform to prior conceptions
    3. Organizational inertia and politics:
    Strong forces within organizations resist making decisions calling for major change
  25. 25TPS: Transaction processing systems(Input > Output – closed system), Perform and record daily routine transactions necessary to conduct business, Examples: sales order entry, payroll, shipping, Serve operational levels, information generally must be easily available, current, and accurate.
  26. 26Decision Support (General) - Business IntelligenceBusiness Intelligence Systems for Decision support: Middle management needs systems to help with monitoring, controlling, decision-making, and administrative activities. All of the management systems we have just described are systems for business intelligence. Business intelligence is a contemporary term for data and software tools for organizing, analyzing, and providing access to data to help managers and other enterprise users make more informed decisions. (MIS/DSS)
  27. 27MIS: Management information systemsMIS: Management information systems Serve middle management - the relationship between TPS and MIS - MIS receive data from an organization’s TPS systems and create outputs that management can use to make strategic decisions, typically provide answers to routine questions, Provide reports on firm’s current performance, based on data from TPS, Typically have little analytic capability
  28. 28DSS: Decision support systemsPlenty of input impossible to put everything – Open system, Open Algorithm – you put a limit to the system and system gives you possibilities, support more non-routine decision making , Serve middle management, Support non-routine decision making
    Often use external information (current stock prices, competitors prices, etc.) as well as infos from TPS and MIS
  29. 29ESS: Executive support systemsSupport senior management, Address non-routine decisions, Requiring judgment, evaluation, and insight, Incorporate data about external events (e.g. new tax laws or competitors) as well as summarized information from internal MIS and DSS, Example: Digital dashboard with real-time view of firm’s financial performance: working capital, accounts receivable, accounts payable, cash flow, and inventory
  30. 30Enterprise Systems Also called “enterprise resource planning (ERP) systems”Suite of integrated software modules and a common central database, Collects data from many divisions of firm for use in nearly all of firm’s internal business activities, Information entered in one process is immediately available for other processes
  31. 31ERP (2)Built around thousands of predefined business processes that reflect best practices such as Finance/accounting,
    Human resources, Manufacturing/production, Sales/marketing, etc.
    To implement, firms:
    Select functions of system they wish to use, Map business processes to software processes, Use software’s configuration tables for customizing
  32. 32Business value of ERP SystemsIncrease operational efficiency
    Provide firm wide information to support decision making, Enable rapid responses to customer requests for information or products, Include analytical tools to evaluate overall organizational performance
  33. 33Supply Chain Management (SCM)1. Vendor Management Inventory (VMI) 2.Collaborative, Planning Forecasting and Replenishment (CPFR)
  34. 34Information and SCM1. Inefficiencies cut into a company’s operating costs - Can waste up to 25% of operating expenses
    2. Just-in-time strategy: Components arrive as they are needed, Finished goods shipped after leaving assembly line, 3.Safety stock - Buffer for lack of flexibility in supply chain, 4.Bullwhip effect- Information about product demand gets distorted as it passes from one entity to next across supply chain
  35. 35Value of SCM SystemsMatch supply to demand
    Reduce inventory levels
    Improve delivery service
    Speed product time to market
    Use assets more effectively
    Reduced supply chain costs lead to increased profitability
    Increased sales
  36. 36VMIVendor-managed inventory (VMI) is a family of business models in which the buyer of a product provides certain information to a supplier of that product who takes full responsibility for maintaining an agreed inventory of the material. VMI makes it less likely that a business will unintentionally become out of stock and reduces inventory in the supply chain. Furthermore, supplier representatives in a store benefit the vendor by ensuring the product is properly displayed and store staff are familiar with the features of the product line
  37. 37Supply Chain Planning - Collaborative Planning, Forecasting & Replenishment (CPFR)Is a concept that aims to enhance supply chain integration by supporting and assisting joint practices. CPFR seeks cooperative management of inventory through joint visibility and replenishment of products throughout the supply chain. Information shared between suppliers and retailers aids in planning and satisfying customer demands through a supportive system of shared information. This allows for continuous updating of inventory and upcoming requirements, making the end-to-end supply chain process more efficient. Efficiency is created through the decrease expenditures for merchandising, inventory, logistics, and transportation across all trading partners
  38. 38Customer Relationship Mangement (CRM)Knowing the customer - In large businesses, too many customers and too many ways customers interact with firm,
    CRM systems - Capture and integrate customer data from all over the organization, Consolidate and analyze customer data, Distribute customer information to various systems and customer touch points across enterprise, Provide single enterprise view of customers
  39. 39Two main types of CRM software1. Operational CRM: Customer-facing applications, E.g. sales force automation, call center and customer service support, and marketing automation
    2.. Analytical CRM: Analyze customer data output from operational CRM applications, Based on data warehouses populated by operational CRM systems and customer touch points Customer lifetime value (CLTV)
  40. 40CLTV(Average Value of a Sale) X (Number of Repeat Transactions) X (Average Retention Time in Months or Years for a Typical Customer)
  41. 41Business Value of CRMIncreased customer satisfaction, Reduced direct-marketing costs, More effective marketing, Lower costs for customer acquisition/retention, Increased sales revenue, Reduce churn rate Number of customers who stop using or purchasing products or services from a company.
    Indicator of growth or decline of firm’s customer base
  42. 42Knowledge Management (1)Knowledge management systems among fastest growing areas of software investment, Substantial part of a firm’s stock market value is related to intangible assets: knowledge, brands, reputations, and unique business processes
  43. 43Using KnowledgeTo transform information into knowledge, firm must expend additional resources to discover patterns, rules, and contexts where knowledge works
    Knowing how to do things effectively and efficiently in ways others cannot duplicate is prime source of profit and competitive advantage
  44. 44Learning CurveOrganizational learning: Process in which organizations learn, Gain experience through collection of data, measurement, trial and error, and feedback
    Adjust behavior to reflect experience
  45. 45Definition knowledge management 4 stages of knowledge managementDescribes the process from acquiring knowledge to applying it as a value chain.
    Knowledge management value chain:
    Each stage of the chain adds value to raw data and information as they are transformed into usable knowledge
    Knowledge acquisition
    Knowledge storage
    Knowledge dissemination
    Knowledge application
  46. 46Strategic Alignment Model (PIC)Strategic Alignment Model (PIC)
  47. 47Strategic Alignment Model (1)Four Domains
    Two internal and two external domains
    External domains also referred to as Strategy Domains (Business Strategy Domain and IT Strategy Domain)
    Internal domains also known as Infrastructure Domains (Business Infrastructure and IT Infrastructure Domains)
  48. 48Strategic Alignment Model (2)Building blocks: Strategic Fit (Between external business domain and internal business domain – same for IT domains);
    Functional Integration – Need to integrate business and IT domains. Building Blocks: Strategic Fit, Functional Integration and Cross-Domain Relationship - Identify your strongest and weakest domain, Need to develop communication with and increase understanding of weaker domains
    Understand relationship between domains when change in strategy occurs
  49. 49How can information systems support different global business strategies?There is a connection between firm strategy and information systems design: Transnational firms must develop networked system configurations and permit considerable decentralization of development and operations, Franchisers almost always duplicate systems across many countries and use centralized financial controls, Multinationals typically rely on decentralized independence among foreign units with some movement toward development of networks, Domestic exporters typically are centralized in domestic headquarters with some decentralized operations permitted.
  50. 504 Global StrategiesThese are domestic exporter, multinational, franchiser, and transna- tional.
  51. 51Organizational StructureEach of these strategies is pursued with a specific organizational structure:
    Centralized: Systems development and operation occur totally at domestic home base, Duplicated: Development occurs at home base but operations are handed over to autonomous units in foreign locations, Decentralized: Each foreign unit designs own solutions and systems, Networked: Development and operations occur in coordinated fashion across all units

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Flashcards on MIS, created by Neusser Meppi on 23/04/2015.
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Neusser Meppi
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