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Flashcards by jenniferelkhoury, updated more than 1 year ago
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Created by jenniferelkhoury
over 8 years ago
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| Question | Answer |
| Why do we need information? | So managers at various levels within a business can make informed decisions. |
| Information has to be accurate, timely (available), complete and relevant. If not? | Then an organisation is at distinct disadvantage. |
| So, what is relevant? | - Depends on what organisation is trying to achieve (it's strategy) - And that depends on a number of things |
| Modern organisations compete in a challenging environment. To remain competitive, they must... | React rapidly to problems and opportunities that arise from extremely dynamic conditions. |
| A business environment is comprised of a number of factors in which businesses conduct their operations. These are: | - Social - Legal - Economic - Physical - Political *Significant changes in any of these factors are likely to create business pressures on organisations *Organisations typically respond to these pressures with activities supported by IT. |
| Business Environments Map | |
| What are the 3 Major Business Pressures? | - Market Pressures - Technology Pressures - Societal/Political/Legal Pressures |
| What are the 4 factors of Market Pressures? | - Global Economy - Intense Competition - Changing nature of the workforce - Powerful customers |
| What are 2 factors of Technology Pressures? | - Technological Innovation - Information Overload |
| What are 5 factors of Societal/Political/Legal Pressures? | - Social Responsibility - Government regulation/deregulation - Spending for social programs - Spending to protect against terrorism - Ethics |
| Given all pressures placed on a business, what do they need to develop in order to survive and compete? | An organisational strategy. |
| Every organisation exists for some reason. Examples of this may be? | - To make a profit is the most obvious - But it may be to help its members (RACV) or provide humanitarian aid (CARE) or a charity. |
| An organisational strategy is developed by 2 factors, these are? | Goals Objectives |
| What is the aim of a organisational strategy through goals and objectives? | - The aim is to create value - By way of making money, helping members or providing aid |
| What does an organisational structure establish? | The structure, features, and functions of Information Systems (IS) that will be used in an organisation. |
| An IS must align with the goals of the organisation. Why is this? | The technology, the computer and hardware, are not enough; Even the people and the procedures are of little use unless they are used to support the business objectives. |
| For a business to be successful, it must be: | Competitive |
| A competitive business strategy ensures that: | The organisational goals and objectives and the organisational structure of a business is determined by its competitive strategy. |
| How does an organisational strategy determine what information systems are used by an organisation? (chart) | |
| In regards to Competitive Strategy, what its the best known framework for analysing competitiveness? | Michael Porter's competitive forces model |
| Why do companies use Porter's model? | To develop strategies to increase their competitive edge. |
| What does Porter's model demonstrate in regards to IT? | How IT can make a company more competitive? |
| How is the Web involved? | - Although the web has changed the nature of competition, it has not changed Porter's 5 fundamental forces. - Porter concludes that the overall impact of the Web is to increase competition, which generally diminishes a firm's profitability. |
| Porter’s model identifies five major forces that can endanger or enhance a company’s position in a given industry. These 5 forces model is: | |
| 5 Forces Examples? (Table) | |
| When can an organisation decide where it wants to position itself within it's industry? | When the organisation has assessed the competitive situation for their industry. This determines its competitive strategy. |
| Organisations continually try to develop strategies to counter the five competitive forces identified by Porter. It is important to note that an organisation's choice of strategy involves what? | Trade-offs – A company that concentrates only on cost leadership might not have the resources available for research and development – A company that invests in customer happiness (customer-orientation strategy) will experience increased costs |
| Companies must select a strategy and then stay with it. This is because: | - A confused strategy cannot succeed. - This selection, in turn, decides how a company will utilise its information systems. |
| After analysing industry structure, the organisation then determines the best competitive strategy. Which 4 factors has Porter identified must be consistent with strategy? | - Goals - Objectives - Culture - Activities |
| Porter identified 5 generic competitive strategies: (table) | |
| We know that after analysing industry structure, the organisation then determines the best competitive strategy. They then need to: | Organise and structure the business to implement that strategy. |
| 2 Examples of this? | - For example, if they are to be the cheapest in the industry then they have to develop business activities that make them economically advantageous as possible. – It may be that the emphasis is on differentiation, say quality, then they have to develop business activities that ensure the highest quality of their products. |
| How is this done? | By the Value Chain |
| Organisations use the Porter's 5 Forces and Competitive Strategy Models to design general strategies. To identify specific activities where they can use competitive strategies for the greatest impact, they use: | Porter's Value Chain Model |
| What is a value chain? | - A value chain is a sequence of activities through which an organisation's inputs and transformed into more valuable outputs. |
| What does the value chain identify? | Identifies points where an organisation can use information technology to achieve competitive advantage. |
| If an organisation makes a change or introduces a new way of doing something that adds value, then is makes more money. (profit) this is done by: | Changing something along the Value Chain. |
| According to Porter’s value chain model, the activities conducted in any organization can be divided into two categories: | - Primary Activities - Support Activities |
| What are Primary Activities? | - Relate to the production and distribution of the firm's products and services. - These activities create value for which customers are willing to pay. |
| What are support activities? | - The primary activities are buttressed by the support activities. - Unlike primary activities, support activities do not add value directly to the firm's products or services. - They contribute to the firm's competitive advantage by supporting the primary activities. |
| The Value chain (Chart) | |
| Linkages - What was Porter's idea when creating the concept of Value Chains? | - To create integrated, cross-departmental business systems - Do not automate or improve existing systems - Instead, create new processes to integrate activities of all departments across entire value chain |
| What is the 'holy grail' alignment of organisations? | Business-Information technology alignment, or strategic alignment |
| What is Business-information technology alignment? | - The tight integration of the IT functions with the organisation's strategy, mission and goals - The IT functions directly support the business objectives of the organisation |
| There are 6 characterises of excellent alignment: | ● Organizations view IT as an engine of innovation that continually transforms the business, often creating new revenue streams ● Organizations view their internal and external customers and their customer service func- tion as supremely important ● Organizations rotate business and IT professionals across departments and job functions ● Organizations provide overarching goals that are completely clear to each IT and business employee ● Organizations ensure that IT employees understand how the company makes (or loses) money ● Organizations create a vibrant and inclusive company culture. |
| Many organisations fail to achieve close alignment. Given the importance of business-IT alignment, why do so many organisations fail to implement this policy? The major reasons are: | – Business managers and IT managers have different objectives – The business and IT departments are ignorant of the other group’s expertise – A lack of communication. |
| One solution to this problem is: | To map and improve business and IT business processes to achieve greater alignment. |
| What is a Business Process? | A business process is an ongoing collection of related activities that create a product or a service of value to the organisation, it's business partners, and/or it's customers. |
| A process is comprised of 3 fundamental elements: | – Inputs: Materials, services, and information that flow through and are transformed as a result of process activities. – Resources: People and equipment that perform process activities. – Outputs: The product or a service created by the process. |
| Why do Business Processes implement value chains or portions of value chains? | - To add Value - Thus each value chain activity consists of one or more business processes. |
| Successful organisations measure their process activities - why? | To evaluate how well they are these executing processes. |
| There are two fundamental metrics that organisations employ in assessing their processes. What are these and what do they focus on? | Efficiency: focuses on doing things well in the process Effectiveness: focuses on doing the things that matter; creating outputs of value to the process customer. *Many processes cross functional areas in an organisation *Other processes involve only a single functional area. |
| Business Processes (Table for example) | |
| Business Process Example (Ordering an ticket from an airline) | |
| How can an organisation use it's business processes to create a competitive advantage? | - If they enable the company to innovate - Or to execute more effectively and efficiently than its competitors *Clearly, good business processes are vital to organizational success. |
| What are 2 steps in which organisations take that determine if their business processes are well designed? | - The 1st step is to document the process by describing its steps, its inputs and outputs, and it's resources - The organisation can then analyse the process and, if necessary, modify it to improve its performance * This is called 'Business process reengineering'. |
| How can Business Processes be documented? | By using formal techniques |
| What is BPMN 2.0? | An international standard developed by the OMG group for documenting Business Processes |
| 4 ways why we document processes? | - For understanding - For analysis - To research possibilities of Automation - To look for possible efficiencies |
| BPMN 2.0 Example | |
| We know now that a business process is supported by an Information System. Why is better information systems essential to the activities of a Value Chain? | Better information systems help add value at various stages within the value chain, in either primary activities, support activities or in linkages. |
| Information systems & Competitive advantage (List) | |
| An information system is a critical enabler of an organisation's business processes. 2 reasons why? | - Information systems facilitate communication & coordination among different functional areas - And allow easy exchange of, and access to, data across processes. |
| IS play a vital role in which 3 areas? | - Executing the process - Capturing and storing process data - Monitoring process performance |
| Important notes to take from this topic: | - IS have an important role to play in fulfilling an organisation's strategy - However, they do not lead the strategy. They are only designed to FIT it (They must be appropriate) - This is one reason why no single information system suits every organisation (because they have different strategies). |
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