Chapter 2 Flashcards
1
Q
Name business pressures
A
Market pressures :
- Globalization
- Changing nature of the workforce
- Powerful customers
Technology pressures:
- Information overload
- Technological innovation and obsolescence
- Rapid development of both new and substitute products and services
- Difficulties in managing data for decision making
- Vast stores of data, information, and knowledge
Societal/political/legal pressures:
- Social responsibility
- Compliance with government regulations
- Protection against terrorist attacks
- Ethical issues
2
Q
What does globalization entail?
A
- It increases competition
- Industries have moved their operations to countries with low labour costs
- The integration and interdependence of economic, social, cultural, and ecological facets of life, made possible by rapid advances in IT
3
Q
What does changing nature of the workforce entail?
A
- Diversified workforce ⟶ aided by IT (ex: working from home)
- IT ⟶ easing integration of employees into traditional workforce
4
Q
What do powerful customer entail?
A
- Customers know more about the products/services, the prices, etc. so they have higher expectations
- Customer intimacy ⟶ firms try to learn as much as they can about their customers to better anticipate and address their needs ⟶ maximizing the customer experience
5
Q
What does social responsibility entail?
A
- Giving money to charities
- Green IT and lowering carbon management ⟶ organizations work to do their part in preserving the environment (right)
6
Q
What does compliance with government regulations entail?
A
- IT provides necessary controls/info for compliance
- Organizations need to respect their regulations even if they feel like they’re expensive constraints on their activities
- Government deregulation = increase in competition
7
Q
What does protection against terrorist attack entails?
A
- Use IT to detect, identify and protect against terrorist attacks ⟶ security systems and identifying patterns of behaviour associated with terrorist activities
- Biometric programs ⟶ collection of fingerprints, photos, iris/retina scanners that tie into gov databases and watchlists
8
Q
What do ethical issues entail?
A
- Need to know right from wrong
- Need to be able to get positive employees’ morale and not destroy company’s image
9
Q
What are the organizational responses?
A
- E-business/e-commerce
- Customer focus
- Make-to-order/mass customization
- Strategic systems
10
Q
What do strategic systems entail?
A
- Provide competitive advantage ⟶ helps control the market and make larger-than-normal profits ⟶ organizations can better negotiate with suppliers and can prevent competitor from entering the market
- They can be essential (if they don’t work, the business doesn’t work ⟶ ex: Amazon)
11
Q
What does customer focus entail?
A
- Provide excellent customer service ⟶ attracting/retaining customers
12
Q
What does make-to-order/mass customization entail?
A
- Producing customized products/services
- Consumer segmentation ⟶ standard specifications for different customer groups ⟶ ex: small, medium, large, x-large
- Configured mass customization ⟶ customer can customized on a range of components ⟶ ex: choosing the colour of your car and the interior, etc.
- Mass customization = make-to-order on a larger scale
13
Q
What is the point of Porter’s Competitive Forces Model?
A
- Can tell an organization how to be more competitive which, in turn, reduces the organization’s margin
- Organizations uses this model to develop strategies to increase their competitive advantage/edge
14
Q
What’s a competitive strategy
A
- A statement that identify an organization’s approach in the face of competition and the plans/policies necessary to carry out the organization’s goals
- Achieving desired outcome when competitors work to prevent the organization from reaching their goal
15
Q
What’s SIS and what does it do?
A
Strategic information system ⟶ helps organization implement strategic goals ⟶ increases productivity/performance ⟶ gives competitive advantage
16
Q
What are the 5 forces of Porter’s Competitive Forces Models?
A
- Threat of new entrants
- Bargaining power of buyers
- Threat of substitute products/services
- Bargaining power of suppliers
- Rivalry among existing competitors
17
Q
What does threat of new entrants do?
A
- When there’s new entrants ⟶ lowers the price organization can charge
- To combat it, organizations can put barriers to entry
18
Q
What are barriers to entry?
A
- Supply-side economies of scale
- Demand-side economies of scale
- Capital requirements
- High fixed costs
- Restrictive government policy
- Unequal access to distribution channels
- Learning/experience curves
- Incumbency advantages independent of size
19
Q
What does the bargaining power of suppliers do?
A
- When the bargaining power of supplier go up ⟶ increases the price organization need to pay towards suppliers
- what increases it ⟶ if there’s a few large suppliers, if your industry is a small part of the supplier’s demand, if organization finds it difficult to change from their existing suppliers
20
Q
What does the bargaining power of buyers do?
A
- When this goes up, organizations can’t raise prices
- Factors that increases it ⟶ buyers buy in large volume, buyers can easily switch to competitors, buyers know a lot about the firm’s cost structure
- IT affects bargaining power of buyers ⟶ internet provides detailed information, IT-administered loyalty programs (customer focus) promotes customers to stay with organization
21
Q
What does intra-industry rivalry do?
A
- Makes prices go down
- Factors that increases it ⟶ lots of firms (especially of the same size), competitors offers similar product/service, slow industry growth
- It affects it ⟶ internet globalizes commerce (more competitors), web-based personalization can reduce product similarity
22
Q
What does the threat of substitute product/service do?
A
- Lowers the ability to raise prices and may lower demand
- Factors that increases it ⟶ radical innovation, changing taste/preferences, convergence of product/features
23
Q
What’s business-IT alignment?
A
- Tight integration of the IT function with the organization’s strategy, mission and goal. IT function directly supports the business objectives of the organization
24
Q
What’s IT governance?
A
- The management of IT throughout the organization ⟶ so IT operations align with business strategies and ensure that IT investments supports business objectives
- IT steering committee
25
What are the 6 characteristic of excellent alignment?
1. Recognize IT as an engine for innovation and revenue
2. Organizations have to views their customers and customer service as extremely important
3. Organization need to have an collaborative environment
4. Organizations provide overarching goals that are clear to business and IT employees
5. IT employees need to understand how company makes and loses money
6. Rotates business and IT professionals across departments and job functions
26
What's corporate governance?
Board of directors/executives manage the organization
27
What are the components of a business process?
- Inputs
- Ressources
- Outputs
28
What's a business process?
A series of related task performed in a particular order that create a product/service of value to the organization/business partners/customers
29
What's efficiency?
Make the product/service with less inputs
30
What's effectiveness?
Creating the outputs that have value
31
Give an example of a marketing and a MIS business process?
Marketing: Managing customer service
IMS: Antivirus control
32
Why study business processes in IS?
- IS is the core of business processes
- IS can bring a competitive advantage
- Cross-Functional processes
33
What's a cross-function process
- Process across multiple areas of a organization ⟶ no single functional area is responsible
34
What's the fulfillment process?
1. Processing customer order
2. Sales department receives customer purchase order ⟶ fulfillment is process is triggered
3. Sales validates the purchase order and creates a sales order
4. Sales communicates data involving the order to other functional areas of the organization and keeps track of the process of the order
5. Warehouse prepares and sends shipment to the customer
6. Accounting creates invoice and sends that to the customer once they're notified of the shipment
7. Customer makes a payment which accounting records
35
How can organization determine if their business processes are well designed?
1. Document process by describing its steps, inputs, resources and outputs
2. Process should efficiently produce outputs that have value for customer (need to meet customer search criteria)
3. Organization can then analyze the process and modify it if necessary to improve its performance
36
What do rectangles mean in a business process schema?
They signify activities that are performed by process resources
37
What do losanges mean in a business process schema?
They signify a decision that needs to be made
38
What are the three areas of business processes?
1. Executing the process
2. Capturing and storing process data ⟶ immediate capturing and storing data provide "real time" feedback
3. Monitoring process performance
39
How does IS help execute the process?
- Informing employees when it is time to complete a task
- Providing required data
- Providing a means to complete the task
40
What is transaction data?
Process data
41
How does IS help the monitoring of the process performance?
- Evaluates information ⟶ determining how well process is being executed
- Evaluation at 2 levels ⟶ process (as a whole) and instance (specific task/activity)
- Monitoring identify problems for process improvement
42
What's BPR?
- Business process reengineering
- Radical redesign of the business process ⟶ we work from a clean slate
- Too difficult, too radical, too lengthy, too comprehensive
43
What's BPI?
- Business process improvement
- Incremental approach to move an organization toward business-process-centered operations
- Focusing on reducing variation in process outputs by identifying the underlying cause of the variation
- SixSigma
44
What are the 5 basic phases of successful BPI?
1. Define the "as is" process activities, process inputs, process resources and process outputs
2. Measure ⟶ identify the relevant process metrics and collect data to understand how metrics evolve over time
3. Analyze the collected data to identify problems with the processes and their root cause
4. Improve the process by giving out possible solutions to fix the root cause, define the "to be" processes and implement the most appropriate one
5. Process metrics and monitor the improved process after solution has been implemented
45
What's BPM?
- Business process management
- Used to support continuous BPI initiatives for core business processes over time ⟶ managing BPIs
- Important components ⟶ process modelling and BAM (business activity monitoring) = real time measuring/managing business processes (creates valuable records of process behaviours that can be used to improve processes)
- BPMS (business process management suite) ⟶ integrated set of applications used for BPM
46
Measures of excellence in executing business processes include?
- Customer satisfaction
- Cost reduction
- Quality
- Differentiation
- Productivity
- Cycle and fulfillment time reduction
