Final Flashcards
Digital Transformation Pyramid
Stage 1: Digitization- Create Digital Representation
Stage 2: Digitalization- Improve Process
Stage 3: Digital Transformation- Transform Business
% of US capital expenditures that was IT in 2014?
44%
IT Pyramid
Stage 1: Operational Level Systems- Order Processing, Payroll: Transaction Processing Systems (TPS)
Stage 2: Management Level Systems- Sales Management, Inventory Control, Annual Budgeting: Management Information Systems (MIS) and Decision-Support Systems (DSS)
Stage 3: Strategic Level Systems- Sales Forecasting, 5 Year Operating Plan: Executive Support Systems (ESS)
ERP Systems
- Software program where several organizational elements are connected. Single database. Breaking down individual silos. Process and integrationl.
Three types of Cloud Computing
SaaS- Software as a Service (Email, CRM, ERP) CONSUME IT
PaaS- Platform as a Service (App Dev, Decision Support, Web, Streaming) BUILD ON IT
IaaS- Infrastructure as a Service (Caching, Networking, Security, System Mgmt) MIGRATE TO IT
Porter’s Value Chain Model
Addresses the activities that create, deliver, and support, a company’s product or service.
Two categories of Porter’s Value Chain Model
Primary activities- relate directly to the value created in a product or service. Touch product/customer.
Support activities- make it possible for the primary activities to exist and remain coordinated (processing, training, etc.)
Long tail effect
Allows business to realize significant profit out of selling small volumes of hard-to-find items to many customers instead of only selling large volumes of a reduced number of popular items. The total sales of this large number of “non-hit items” is called “the long tail.” Amazon example: increased book variety has 10x the benefit for consumers than lower prices.
Hypercompetition
Just shorter cycles of competition. You have to keep going to stay ahead/keep up.
Levels in Strategic Alignment Maturity Summary
Level 1- Initial/Ad-Hock: Business-IT lack understanding. IT is seen as cost of doing business.
Level 2- Committed Process: Limited Business-IT understanding. IT emerging as an asset.
Level 3- Established Formal Process- Good Business-IT understanding. IT seen as asset and enabler. Consistent governance process.
Level 4- Managed Process- Unified Business-IT knowledge. IT enables & drives business strategy. Enterprise governance process.
Level 5- Optimized Process- Shared objectives & risks. It-Business co-adaptive.
Leading indicator
Tells you about the future. Usually softer things.
Examples: # of patents, customer satisfaction, brand recognition, # of cases shipped, brand growth
Lagging Indicators
Usually financials. Tells you how you did in the past.
Examples: Operating income, Net Revenue, Return on Net Assets, Operating Income Growth
SWOT Analysis
Strengths- Internal
Weaknesses-Internal
Opportunities- External
Threats-External
Competitive advantage
Having competitive advantage today does not mean you’ll have it forever. Potential risks companies face when attempting to use IT to outpace competition include awaking the sleeping giant, bad timing, implementing IT poorly, failing to deliver what users want, and running afoul of the law.
Draw Porter’s Generic Strategies
See slide 23
