5.9 (HL) Flashcards
what are information systems?
An information system (IS) refers to computerized tools and systems that gather, organize, analyse, and manage data to help businesses with decision-making.
For example, a business might hold data from its customers and record them in “files” that need to be protected (username and password) in order to protect customers personal details. This is a simple way of IS.
However, nowadays we have more sophisticated software to gather data mainly used by large companies, especially with the growth of e-commerce. These processes help companies with data mining and data analytics.
what is data mining?
this refers to the process of finding trend, patterns and correlations with large data bases. This data is used for predictive analysis and forecasting purposes.
The term “data mining” originates from the mining industry, where precious materials are extracted from digging earth and rock. Similarly, in relation to information technology, data mining involves sorting out extensive datasets to obtain valuable information.
The process of data mining always starts with a “hypothesis” that needs to be tested. For example, the marketing team might present an idea that customers buy more of a product in a specific time compared to a different one. To prove this, the marketing team can use data mining.
what are data analytics?
shares many characteristics with data mining such as finding trends, patterns and correlations. However, Data analyticsis the management process of examining and scrutinising raw data to find meaningful trends and patterns to support decision making and business planning. Basically, analysing the data!
how can data analytics be used? (this is key to learn)
Descriptive analytics - using data from past performance
Predictive analytics – helps forecasting the future
Prescriptive analytics – using both Descriptive analytics and Predictive analytics, it is used to determine (prescribe) an optimal course of action in the future.
How do we use data mining and data analyticsin an actual business ?
We need to look at this from a business point of view. Let’s take the example of a large retail chain with stores across the country.
The company collects large amounts of data from various sources, including sales transactions, customer demographics, website interactions, and social media engagement. By applying data mining and analytics techniques to this data, the company can find valuable insights to optimize its operations and enhance customer experiences. For example: customer segmentation, price optimization and even personalized recommendations. Additionally, the chain can use this process to manage and monitor their employees.
what is customer segmentation?
Customer segmentation - Using data mining techniques, the retail chain can segment its customer base based on various attributes such as purchasing behaviour, demographics, and geographic location.
what is price optimisation?
Data analytics can help the retail chain optimize pricing strategies to maximize profitability. By analysing competitor pricing, demand elasticity, and customer willingness to pay, the company can dynamically adjust prices for products to maximize revenue while remaining competitive in the market.
what are personaliszed recomentations?
Personalized recommendations - Through data mining algorithms, the retail chain can analyse customer purchase history and browsing behaviour to generate personalized product recommendations. Therefore, the customers are more like to keep buying for the retail chain.
what is managing/monaging employees?
this could be related with Taylor’s approach (from Chapter 2.4 -Unit 2), where he suggested that managers should monitor their employees. Nowadays, the new term is “digital Taylorism” where employers monitor their workers through IT systems. For example, managers can monitor employee’s performance relating their working hours and efficiency. Or simply see when employees logged in and out for the office. Of course there are some downside of this approach.
introduce Advanced computer technologies and the growth of e-commerce?
Information technology(IT) and the internetare becoming more and more important forbusiness operations because they are easy to use, operate 24 hours a day and have international presence.
E-commerce is simply thetrade of goods and services using the internet.
what are the benfits of e-commerce for the business?
Firms can sell their products 24 hours a day anywhere in the world.Hence, reach a wider market.
Firms canrespond to competitors faster, such as changing the price.
Less packagingto reduce waste and production costs.
The firm saves on overheadssuch as rent, storage, insurance payment and staffing costs of physical stores. This in turn reduces the price of the product for consumers. The firms also save onoperating costs.
It is a better cost-effective method of advertisings a product, compared to TV for example.
what are the cost of e commerce of the business?
There can behigh set-up costsfor professional websites and marketing, as well aspayment systems.
There arefinance chargesfor using the services of credit card companies, which will increase the costs for the business.
There is risk offraudulent trade, which can cause losses for the customer, business or financial institutions
Firms may be exposed to competitors who take advantage of the products details available online
Running costs may be high for postage and packaging.
what are the benifits of e commerce on the costmer?
Customers can shop online, and don’t have to physically go to the store. Most people these days have access to internet.
Greaterchoice and conveniencefor the customers. They can easily compare various products before deciding which one to purchase.
Transactions are much faster. Customers can quickly find a product and place their order.
what are the disadvantages of e commerce on customers?
Customers may find it time-consuming, difficult or boring. Especially when the customer needs to see the product before they purchase it. There is also a time-lag between purchase and delivery, as well as increased difficulty to return faulty products.
Customers may suffer from information overloadfrom the number of websites on the internet, preferring to visit physical stores.
The technology to sustain e-commerce isnot available in all countries or to all businesses. The sites need to beupdated regularly, but must be easy for customers to access, leading to high maintenance costs.
The internet isvolatile, prone to hackers and breakdowns.
what is cybercrime?
refers to any form of illegal activity carried out using electronic methods to deliberately and maliciously attack computer hardware or software, including computer networks, devices, and critical infrastructures. Most cybercrime is committed byhackers (or cybercriminals).
Cybercrime typically disrupts the activities of a business and can temporarily stop its operations. This results in the business suffering from a loss of sales revenue, and potential damage to its corporate image, while the issue is fixed or repaired.
