1: CH2 IT in a business environment

Question 1

1. A structured set of activities, executed in an organization

Answer 1

Business Process

Question 2

2. A simple action, normally part of a business process

Answer 2

Business Transaction

Question 3

3. A collection of related business processes

Answer 3

Business Function

Question 4

4. A sequence of business functions via which business processes are sequenced to produce products or services with added value

Answer 4

Value Chain

Question 5

5. Those functions in the Porter Value chain model that directly producing added value

Answer 5

Primary Activities

Question 6

6. Those functions in the Porter Value chain model ensure that the primary activities can run smoothly

Answer 6

Support Activities

Question 7

7. The extension of the value chain over several organizations

Answer 7

Extended Value Chain

Question 8

8. The system of organizations and activities from raw materials to finished goods

Answer 8

Supply Chain

Question 9

9. A single system for the creation, storage, management and processing of data

Answer 9

Database Management System (DBMS)

Question 10

10. A collection of equipment, services and human effort supporting the creation, storage, management and processing of information

Answer 10

Information Technology Infrastructure

Question 11

11. Supporting individual business processes by the storage and processing of their data

Answer 11

Business Information Systems

Question 12

12. Using information systems to make the execution of groups of related business processes more efficient

Answer 12

Business Process Automation

Question 13

13. Automating complete business processes along the value chain of an organization

Answer 13

Enterprise Resource Planning (ERP) Systems

Question 14

• Explain what business processes, activities and business functions are. Give and discuss an example of each.

Answer 14

Business process= A structured set of activities, executed in an organization. Eg. process of order fulfillment in an e-commerce company, as this requires multiple steps to deliver product to customer.
Business activities= tasks or actions that contribute to the completion of a business process. Eg. receiving order, processing payment, etc.
Business function= A collection of related business processes that are responsible for a specific set of tasks. Eg. production function includes various tasks like manufacturing, sourcing raw materials, production planning etc.

Question 15

• Describe the value chain model of Michael Porter. & Discuss the groups of business processes along the value chain.

Answer 15

Value chain model= framework to analyze internal activities in order to identify opportunities for creating value and gaining competitive advantage.
1. Primary Activities: These are the activities directly involved in the creation and delivery of a product or service. Porter identified five primary activities:
* Inbound Logistics: Activities related to receiving, storing, and managing inputs or raw materials for production.
* Operations: Activities involved in transforming raw materials into finished products or services.
* Outbound Logistics: Activities related to storing and distributing finished products to customers.
* Marketing and Sales: Activities involved in promoting and selling products or services to customers.
* Service: Activities aimed at providing support and assistance to customers after the sale, such as maintenance and customer service.
2. Support Activities: These are activities that facilitate and support the primary activities. Porter identified four support activities:
* Procurement: Activities related to sourcing inputs, negotiating contracts with suppliers, and managing supplier relationships.
* Technology Development: Activities involved in research, development, and innovation to improve products or processes.
* Human Resource Management: Activities related to recruiting, training, and managing the workforce to support the organization’s goals.
* Infrastructure: Activities that provide the necessary support systems and resources for the organization, such as information technology, finance, and organizational structure.

Question 16

• Describe how value chains are integrated into value systems and into the supply chain

Answer 16

You can connect value chains of different companies that are related, forming a value system. For example, in a supply chain for a car, one firm makes the tires while another makes the rubber. By connecting these companies, their value chains become a value system, and in these interactions (acting as the glue between the value chains), IT can play an important role.
From left to right (upstream), you have the goods that go in that direction, but from right to left (downstream, also known as going into the past), you can find information about your supply chain. For instance, how many kilograms of rubber you need, which can be supported by IT.

For example, a supermarket can forecast the demand so that the supplier knows how much to deliver in the future.

Question 17

• Describe three ways to use information systems in businesses. What are the main differences between these ways to use information systems? (p21)

Answer 17

• data processing supports isolated processes = information systems are primarily used to process and manipulate data. This includes tasks such as data entry, storage, retrieval, manipulation, and reporting. Eg. database management systems (DBMS), data warehouses, and data analytics tools.
• task automation supports group of processes = using information systems to automate routine and repetitive tasks within an organization. These systems streamline workflows, reduce manual effort, and minimize errors by automating tasks such as data entry, document generation, report generation, and email notifications.
• integrated information systems: supply chain. = comprehensive systems that integrate various components, functionalities, and data sources within an organization. Eg. Enterprise Resource Planning (ERP) systems, Customer Relationship Management (CRM) systems, and Supply Chain Management (SCM) systems.

You can also look at these three as maturity levels: from most basic way to use it to more complex way to use.

Question 18

• Describe the properties of integrated information systems. How are these properties different from task automation?

Answer 18

Task automation= often firms use IT in this way, to automate tasks withing one single business function aka monolithic system. There is no communication between business units, leads to silos. Bcs its easy to have a software for one busines s unit, but to integrate those into one software, is difficult.
Integrated information systems= a way to integrate all those systems SAP. You have to make a trade-off between: do you want an IT system that is best of breed or do you want an IT system which can easily be integrated with other IT systems. You have to ask how important I sit for one function to communicate with the other. Involve end-user as these are involved an using the system. Dream big, start small, and make sure u have an architecture for ur desired end goal. Integrating system is quite complex, it is powerful, but could fail.
Difference= ISS all different parts work together they consider the whole organization, in automation all parts work separately.
Properties of integrated information systems: it is a structured approach, have a vision, consider whole organization activities and make an overall architecture (dream big, start small, but have a vision).
X

Question 19

• Discuss the attention points and issues when implementing integrated information systems. Which of these issues are also important for the implementation of task automation?

Answer 19

X

Question 20

• Explain why the introduction of integrated information systems requires a way of thinking that differs from the thinking of the “traditional” technically oriented IT specialist.

Answer 20

X

Question 21

• Discuss the benefits of the use of information systems.

Answer 21

Operational benefits
Daily business processes more efficiently
E.g. time savings, better supply management, lower communication costs, …
Tactical benefits
Organization can better realize its goals
E.g. marketing campaigns, on-line knowledge databases, on-line parcel tracking
Strategic benefits
The business develops a better strategy E.g. Internet companies

Question 22

• What is the difference between quantifiable and non-quantifiable benefits when using information systems? Give an example of each type of benefit of the use of information systems.

Answer 22

Quantifiable benefits
Represent an amount of money
Can be estimated in advance
Can be compared to the cost
E.g. Stock decreases, personnel savings
Non-quantifiable benefits
Cannot (or can hardly) be expressed in money May however be important
Should also be weighed in against the cost E.g. Better customer service, high tech image

Question 23

• Many consider information technology as a commodity. Why is that?

Answer 23

Carr introduced the idea that information technology (IT) does not provide a competitive advantage to companies in a strategic manner. In Does IT Matter? Carr argues that IT has become a commodity, and because the very nature of strategy requires differentiation, IT cannot possibly qualify.

Question 24

• Explain how the use of information technology may lead to a competitive advantage, even when IT resources are commodities.

Answer 24

Slide 56: instead of focusing on IT resources which are abundantly available on the market, focus on capabilities which take years to develop and make a difference.